Mike Khouw's Coinstar (CSTR) Trade

CBNC Fast Money's Mike Khouw suggested investors to consider an option strategy in Coinstar, Inc.

ahead of earnings. Coinstar (

) usually moves approximately 6.50% on earnings, and right now the option market is implying a move of 12.5%. Mike Khouw said that this stock is pretty favored by the Wall Street, and there aren't any sell calls on it. The average price target is around $57. Mike Khouw wants to buy the calendar spread. Specifically, he wants to sell the November $42 put for $1.50, and buy the January $42 put for $2.80. This trading structure would cost him $1.30, and the idea behind this trade is that premium for the front month options is going to decline much faster than the premium for the options that he bought. Coinstar (

) fell 1.02%, and closed at $45.60 in the regular trading session. It gained 1.43% in the after hours. CSTR is going to report earnings tomorrow.