Mike Khouw spoke on CNBC's Options Action about a large bearish bet against Deutsche Bank AG (USA) DB.
The stock has been struggling and it dropped around 27 percent since the June 23. Khouw said Deutsche Bank options are now three times more expensive than they were a year ago and he's wondering how low can the stock drop. He noticed on Wednesday that a trader bought 9,000 contracts of the August 12 puts for $1, paying $900,000 for the trade.
The breakeven for the trade is at $11 or 15.19 percent lower from the closing price on Wednesday. The trade is going to catch earnings results, which are going to be announced on July 27.
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