Mike Khouw Sees Unusual Options Activity In China ETF

Mike Khouw spoke on CNBC's "Options Action" about unusually high, bearish options activity in iShares FTSE/Xinhua China 25 Index (ETF) FXI.

He said that put options outnumbered calls two to one Tuesday and that was largely a result of a large put spread that was purchased. Over 11,000 contracts of the February 47/43 put spread were bought for $1.50 in the early trading session. The trade breaks even at $45.50 or 4.33 below the current stock price. It can maximally make a profit of $2.50, if the stock drops to $43 or lower.