Mike Khouw Sees Unusual Activity Options In Freeport-McMoRan

Speaking on CNBC's Options Action, Mike Khouw said that there was unusually high options activity in Freeport-McMoRan Inc FCX on Tuesday, when the stock spiked 5.93 percent.

During the trading session, one trade caught Khouw's attention. A trader bought 3,000 contracts of the August 15 puts for $2.13. The trade breaks even at $12.87 or 17.23 percent below current market price.

Khouw added that Freeport-McMoRan is a levered business and the stock has already moved around 18 percent in 2017, so he thinks that the premium for the August 15 puts might not be that expensive as it seems at the first look.