On CNBC's "Options Action," Mike Khouw spoke about unusually high options activity in Visa Inc (NYSE:V) ahead of earnings. The company is going to report earnings on Tuesday, after the bell, and the options market is implying a move of 3% in either direction. The move is in line with the historical average.
During the session on Monday, Khouw noticed that calls outnumbered puts by about 3 to 1, on above average volume. He saw the most opening activity in the July 31, $197.50 calls. Around 1,800 contracts were traded and buyers paid around $2.70 for them. The trade breaks even at $200.20 or around 1.7% above the closing price on Monday.