Mike Khouw Sees Unusual Options Activity In VIXY

On CNBC's "Options Action," Mike Khouw said that calls significantly outpaced puts in ProShares VIX Short-Term Futures ETF (BATS:VIXY) on Monday.

The most active options were the March $17 calls and they were trading for 35 cents. The trade breaks even at $17.35 or more than 40% above the ETF's closing price on Monday. Khouw also noticed call purchases in VIX and ProShares UltraShort 20+ Year Treasury (NYSE:TBT). This combined activity could mean that people are using the current rally as an opportunity to put some hedges on, said Khouw.