Tony Zhang Sees Unusual Options Activity In Whirlpool

Tony Zhang of OptionsPlay spoke on CNBC's "Options Action" about unusually high options activity in Whirlpool Corporation WHR. He said it doesn't trade very actively, but on Tuesday it traded more than 3.5 times the average daily options volume. A lot of that volume were puts that outpaced calls almost 2 to 1.

The company is going to report earnings on Wednesday and the options market is implying a move of 5.5% in either direction. The stock moved 4.7% on average on the event. Despite beating earnings in the last six quarters, one particularly bearish trade did stand out.

Somebody bought around 1,700 contracts of the July 23, $210-strike puts for $4.65. The trader laid out almost $800,000 to bet Whirlpool is going to trade at least 4% lower over the next few days. The stock has to trade to $200 or about 6% lower for the trade structure to pay out a 1 to 1 risk-reward ratio.