Mike Khouw Sees Unusual Activity In Western Digital

On CNBC's "Options Action," Mike Khouw spoke about unusually high options activity in Western Digital Corp WDC.

He noticed that calls outnumbered puts 2-to-1, and there was one big trade in the Oct. 11 expiration that caught his attention. He finds the trade interesting because someone is betting that the stock is going to trade higher before earnings results, scheduled for Oct. 24.

A trader bought 3,000 contracts of the October $62 call for $1.30. The trade breaks even at $63.30, or 3.04% above the current stock price.