That's at least according to the options market, which is implying a 10% move in either direction for shares of the athletic apparel retailer following its upcoming earnings report.
"Some of the activity we saw was suggesting that some options traders believed that that 10% move will be to the upside," he said Wednesday on CNBC'sOne trade that caught Khouw's eye was a purchase of the $180 calls expiring on Friday. A mystery trader paid about $7 for just over 400 of those calls, financing that trade by selling $3 worth of $200 calls expiring at the end of the month.
It's also a bet that the implied volatility in the longer-dated monthly calls — which is currently around 64% versus its average of 30% — will drop dramatically, the longtime strategist said.
OptionsAction Which means sell sell sell sell!!!
OptionsAction yeah and another mystery trader bets that it is likely to fall 10%