Mike Khouw Sees Unusual Options Activity In Transocean

On CNBC's "Options Action", Mike Khouw spoke about unusually high options volume in Transocean LTD RIG. The options trading volume was two times the average daily options volume.

During the trading session, Khouw noticed a sale of 20,000 contracts of the Jan. 9 puts and a purchase of 10,000 contracts of the Jan. 11 calls for approximately even money. If the stock trades below $9 at the January expiration, the trader is going to have to buy the stock for $9. If it trades approximately 5 percent higher, the trader is going to make a profit on the trade.