Mike Khouw Sees Unusual Activity In Lululemon Ahead Of Earnings

CNBC Options Action's Mike Khouw spoke on the show about unusually high options activity in Lululemon Athletica Inc LULU.

The company is going to report earnings on Thursday after the market close and the options market is implying a move of 7.5% in either direction. That is less than the average move of 9.5% that we have seen over the last eight quarters.

The most active options on Wednesday were the June 12, $300 strike puts. Traders were paying $3.75 for them. The trade breaks even at $296.25 or 8.35% below the closing price on Wednesday.

Karen Finerman revealed she has a long position in the name and she bought those puts because she wants to be certain what her downside is. She said lululemon is going to beat expectations on revenue, but she doesn't know if that is already priced in.