On CNBC's "Options Action," Tony Zhang said Broadcom Inc AVGO broke out from a 10-month trading range earlier this week. On Wednesday, he saw options traders betting on the follow-through on earnings. The options volume in the name was 1.4 times the average daily options volume and the options market is implying a 3.9% move in either direction on earnings, scheduled for Thursday.
About 10% of Wednesday's volume was in a single strike, the September $500 calls. A trader bought around 1,000 contracts at $8.52. The trade breaks even at $508.52 or 3.11% above the closing price on Wednesday.
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