Traders are betting on quick bounce from this Dow stock

Options Action: AXP bounce back

American Express just can't get any credit from investors.

Shares of the charge card giant hit a 52-low on Tuesday after a Guggenheim Partners downgrade and last week's stunning development that Costco would end an exclusivity deal with the company. Despite the selloff, some options traders are betting on a quick rally this week.

In a series of trades that attracted some attention in the option pits, one trader bought 2,000 contracts of the Feb. 27 weekly 80-strike calls for 70 cents each. Since each call contract controls 100 shares, the total cost of the trade is $140,000 ($70 x 2000) and it is only profitable if American Express shares are above $80.70 by the end of next week, or about 3 percent higher than Tuesday's close.

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"People were hard-pressed to try to pick a bottom by purchasing the stock," strategist Michael Khouw said. "But buying calls, if it is going to bounce, is probably the right way to make a bullish bet."

Still, the trade remains a long shot. Given the call option's delta, the options market is suggesting only a 40 percent chance that stock will above $80 by the Feb. 27 expiration.

"That was just one of the many strikes that was exceptionally active today," said Khouw, a CNBC contributor.

American Express shares traded as low as $77.12 on Tuesday, its lowest point since Oct. 16, 2013. It's been a tough year for American Express investors. While rivals Visa and MasterCard are up a respective 3 and 2 percent on the year, American Express shares are down 17 percent, making it the worst performing stock in the Dow in 2015.