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This hot stock could cool off: Trader

Options Action: Starbucks too hot to touch?

Starbucks shares are trading at all-time highs ahead of the company's fiscal 2015 third quarter earnings report Thursday after the closing bell. But some traders are betting that the hot stock could start to cool down soon.

On Wednesday, when options volume ran more than 1.5 times its daily average and bearish activity outpaced bullish, traders were placing bets that Starbucks shares could fall more than 7 percent in the next month.

These traders bought the August 53.50-strike puts for an average price of 75 cents. Since buying a put allows a trader to sell a stock at a set price at a given time, this trade is profitable if Starbucks shares fall below $52.75 by August expiration. The stock was trading at $56.70 Thursday morning.

"The options market is implying a one-day move in the stock of about 4.4 percent in either direction, that's versus the historical average of 3.3 percent," CNBC contributor and options expert Mike Khouw said Wednesday on CNBC's "Fast Money." Khouw noted that the sentiment is leaning toward the downside, as there was also some heavy call selling during Wednesday trading.

"The bearish activity I'm seeing in the stock is telling me that options traders are getting a little bit nervous at current levels," he said.

Shares of the coffee giant are up nearly 40 percent this year, making it one of the top performing stocks in the consumer discretionary sector.

Wall Street analysts surveyed by FactSet are expecting the company to report earnings of 41 cents a share on $4.9 billion in revenue.

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