Mike Khouw Sees Unusual Options Activity In PepsiCo

On CNBC's Options Action, Mike Khouw said that call options trading volume in PepsiCo, Inc. PEP on Monday was more than 4 times higher than its average daily call options volume.

He explained that traders were buying the July 125 calls for $0.30. The trade breaks even at $125.30 or 10.29 percent above the current market price. He added that options are cheap in PepsiCo because it has a very low implied volatility.