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Mike Khouw Sees Unusual Options Activity In Gap

On CNBC's "Options Action," Mike Khouw said that Gap Inc (NYSE: GPS) traded at more than twice its average daily options volume on Wednesday.

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On CNBC's "Options Action," Mike Khouw said that Gap Inc (NYSE:GPS) traded at more than twice its average daily options volume on Wednesday.

The company is scheduled to report earnings on Thursday and the options market is implying a move of 9.4% in either direction. Its average move for the event is 7.1%.

Khouw noticed one large trade during the trading session on Wednesday. It was a sale of 2,865 contracts of the August $14.50 put for 12 cents. The seller is willing to own the stock at $14.50 or around 15% below the current stock price. Khouw added that this could also be a trader with a short position, looking to cover at these levels.