If you had been “thinking outside the box” you would have seen this one coming. CarMax (KMX, $15.97, down $2.37) is getting hammered today after reporting a 55% drop in quarterly profits. The company reported earnings of $29.6 million, or $0.13 a share, down from $65.4 million, or $0.30 a share, versus the year-ago period.

It all makes sense. Consumers are trading in their gas guzzling SUV’s at CarMax because they are having trouble selling them outright. CarMax is buying them at discount prices but because prices are falling on SUV’s, CarMax can’t get rid of them. To make matters worse, the company suspended their guidance for the rest of the year. In other words, things are so bad CarMax can’t even predict where next quarter’s earnings will be. That’s scary if you own the stock.

Today’s 13% drop has sent the shares to a 52-week low. The July 17.50 puts (KMXSW, $2.00, up $1.05) and the July 15 puts (KMXSC, $0.65, up $0.35) have more than doubled with both strike prices trading more than 2,800 contracts thus far.

Rick Rouse