Traders bet on Alcoa earnings

Options Action: Alcoa earnings preview

The release of Alcoa's results has traditionally kicked off earnings seasons for the market. And though the metals company is not as prominent as it once was, some are betting this former Dow component will see a pop after it reports on Wednesday.

On Tuesday, the stock saw twice its average daily options volume, with bulls slightly outnumbering bears. And one trade underscored investors' conviction that the stock will rise smartly when the company reports. Specifically, a trader bought 4,400 contracts of the 13.50-strike calls expiring on April 10 for about 30 cents. The bet is effectively a two-day wager that the stock will rise about 3 percent.

Such a move would be in line with what has happened to the shares in the recent past, even if it's more tepid than market expectations, notes options expert Mike Khouw, a CNBC contributor.

"This is a stock that typically moves about 3 percent on earnings," he said. "But the options market is implying a much-larger move of well over 4 percent this time."

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