Mike Khouw Sees Unusual Options Activity In Baidu

On CNBC's "Options Action," Mike Khouw said calls outpaced puts by about 2 to 1 in Baidu Inc BIDU on Tuesday. The company is going to report earnings on Thursday and the options market is implying a move of 5.1% in either direction. The stock moved 7% on average over the last eight quarters.

The most active options in Bidu on Tuesday were the August 13, $170-strike calls. Around 1,800 contracts were traded for $2.60. The breakeven for the trade is $172.60 or 4.26% above the closing price on Tuesday.