Mike Khouw's Beyond Meat Trade

On CNBC's "Options Action," Mike Khouw suggested investors with a long stock position in Beyond Meat Inc BYND should consider selling the stock and substitute it with an options trade.

Khouw said Beyond Meat is an exceptionally volatile stock with high short interest and it's in the midst of a short squeeze. He explained that the implied volatility is 110%, which is unheard of.

Instead of owning the stock, Khouw wants to sell the Sept. 150 put for $8.50, buy the Sept. 235 call for $23.50 and sell the Sept. 260 call for $15. The trade can be done for no money and it's going to be profitable if the stock closes above $235 at the September expiration. Its maximal profit is $25. If the stock drops below $150, you would have to buy the stock at that price.

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