Mike Khouw Sees Unusual Options Activity In Nordstrom

On CNBC's "Options Action," Mike Khouw said he saw a tremendous amount of options activity across the retail space. Nordstrom, Inc. (NYSE:JWN) was one of the names with high options volume and it reached 2.4 times the average daily options volume on Monday.

During the session, Khouw noticed a big puts sale in Nordstrom and also a purchase of 3,000 contracts of the August $37/$42.50 call spread for 57 cents. The call spread trade is targeting the earnings results, scheduled for August 24 and it breaks even at $37.57 or around 19% above the closing price on Monday. If the stock jumps to $42.50 or higher at the August expiration, the trade is going to reach its maximal profit of $4.93.