Mike Khouw Sees Unusual Options Activity In The TLT

Mike Khouw spoke on CNBC's "Options Action" about an unusually high options activity in iShares Barclays 20+ Yr Treas.Bond TLT. He said that it traded well over three times its average daily options volume.

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Khouw noticed one particularly large trade. A trader bought 20,500 contracts of the January 121/127 call spread for $0.52. The trade breaks even at $121.52 or 3.14 percent above the current stock price. Khouw explained that the trader expects TLT to rise or to put it differently, he expects the long rate to fall, maybe as much as 50 basis points.