Mike Khouw Sees Unusual Options Activity In Apple

On CNBC's "Options Action," Mike Khouw said that calls outpaced puts on Tuesday in Apple Inc. AAPL by about two to one, which is consistent with the action over the last 20 days.

The company is going to report earnings on Wednesday after the bell and the options market is implying a move of 5% in either direction. The average move over the last eight quarters is 4.7%.

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The most active options were the weekly $135-strike calls as over 43,500 contracts were traded for $2.60. The weekly $135 puts were the second most active and they were trading for $2.90. Khouw said that it was mostly retail flows on the call buying and institutional flows on the put buying.