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Amgen could be the biggest winner of the Dow shake-up, says the options market

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Options Action: Unusual activity in Amgen

The big shake-up in the Dow is snagging a bunch of headlines this week, and it's snagging the attention of plenty of options traders, who are positioning themselves to cash in on what could be a major step forward for each of the three new names on the Big Board. 

The three new kids on the block — Amgen, Salesforce, and Honeywell — have surged since news broke of the big switch, but options traders are betting the biggest winner could be the one biotech stock on the list.

"It traded nearly seven times the average daily call volume, a big uptick on the back of that news," Optimize Advisors CIO Michael Khouw said Tuesday on CNBC's "Fast Money." "The most active contracts were the 250-calls that expire at the end of this week, Aug. 28. One buyer paid $2 for 700 contracts on a total of about 3,000 that traded."

Those contracts break even at a stock price of $252, about 1.5% higher from where Amgen closed Tuesday's session. That would be a sizable move into the end of the week, but if Amgen did break above that level, executing these contracts would allow the buyer to own — and profit on — any further upside that could come after the stocks officially join the Dow on Monday. 

Amgen was trading slightly lower in Wednesday's session.

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