On CNBC's "Options Action," Mike Khouw said that Toll Brothers Inc (NYSE:TOL) traded more than four times the average daily call volume Monday. The company is going to report earnings Tuesday and the options market is implying a move of 7.8% in either direction by the end of the week. The average move for the event over the past 8 quarters is 6.1%.
The most active options were the September $46 calls. Around 3,000 contracts were traded for $2.25. Buyers of these calls are betting that the earnings news are going to be positive and that the stock is going to trade above $48.25 in the next four weeks.