Mike Khouw's Coinstar (CSTR) Trade

CBNC Fast Money's Mike Khouw suggested investors to consider an option strategy in Coinstar, Inc. CSTR ahead of earnings. Coinstar (CSTR) 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 (CSTR) 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.