On CNBC’s “Options Action,” Mike Khouw spoke about unusually high options activity in Roku Inc (NASDAQ:ROKU) ahead of earnings. The company is going to report earnings on Wednesday and the options market is implying a move of 8.4% in either direction. It moves 8.2% on earnings, on average.
Calls outpaced puts on Tuesday and during the session, Khouw noticed a purchase of 800 contracts of the September $420/$440 call spread for $8. The trade breaks even at $428 or 2.44% above the closing price on Tuesday. It can make a maximal profit of $12.
