Mike Khouw Sees Unusual Options Activity In Salesforce

On CNBC's "Options Action," Mike Khouw said calls outpaced puts by about 2 to 1 in salesforce.com, inc. CRM on Tuesday and the call options volume was 1.6 times the average daily call volume. The company reports earnings on Wednesday and the options market is implying a move of 5.7% in either direction.

During the session, Khouw noticed a trade that could represent what institutional traders are doing ahead of the earnings report. He noticed a purchase of 1,000 contracts of the September 3, $270/$280 call spread for $2.15. The trade breaks even at $272.15 or 4.81% above the closing price on Tuesday. It could make a maximal profit of $7.85 if the stock jumps around 8% or higher at the September expiration.