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Mike Khouw Sees Unusual Options Activity In S&P 500

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On CNBC's "Options Action", Mike Khouw spoke about an unusually high options activity in the S&P 500. Ho noticed a sale of 19,000 contracts of the December 2020, 2,100-strike puts for $93.

Khouw explained that someone is selling insurance on the S&P 500 and if it drops less than 20 percent until the December 2020 expiration, the trader is going to collect $176 million. He added that there have only been four events in the history where selling puts of that length in time, representing a decline of that amount has really been a dangerous thing to do. These events are the Great Depression, 1970 bear market, the dot-com bubble and the credit crisis.

 

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Posted-In: CNBC Mike Khouw Options ActionOptions Markets Media