Options traders are betting United Airlines could tumble on earnings

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United Airlines has skyrocketed more than 37% since its October lows, but options traders are betting the high-flying stock could be about to hit some turbulence when it reports earnings after the bell Wednesday.

The carrier usually moves quite a bit when its earnings announcements cross the wire, and plenty of traders who have enjoyed gains are hedging their bets ahead of these results.

“Right now, the options market is implying a move of about 5% higher or lower by the end of the week. That’s about in line with the 4.4% or so that the stock has averaged over the last eight quarters,” Michael Khouw, chief investment officer at Optimize Advisors, said Tuesday on CNBC’s “Fast Money.”

Despite calls trading hands more than puts by a ratio of 2-to-1, the most active individual strike in Tuesday’s session was the February expiration 38-puts.

“About 2,000 of those traded for 75 cents, and a buyer of those puts is obviously betting that the stock either will trade below that level, or hedging against the risk that it might,” said Khouw, “and that makes a lot of sense when you consider where this stock was after the last reported quarter. In late October, it traded down to about $32.50.”

United Airlines was up 1% in Wednesday’s session.

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