Mike Khouw Sees Unusual Options Activity In ON Semiconductor

Mike Khouw spoke on CNBC's Options Action about a trade in ON Semiconductor Corp ONNN that caught his attention on Wednesday. Over 11 times daily average options volume was traded in the name and call to put ratio was over 500 to 1. Khouw noticed that somebody bought 5,000 contracts of the January 10 calls for $0.37. The breakeven for the trade is at $10.37 or approximately 6 percent higher at January expiration. The stock is already up 16 percent since the company reported earnings in October and over 40 percent since the October low. Khouw added that it had a little trouble breaking $10 price level and that is why options seem like a good way to trade this stock.