Mike Khouw Sees Unusual Options Activity In The Emerging Markets ETF

On CNBC's "Options Action", Mike Khouw said he saw a really big trade in iShares MSCI Emerging Markets Indx (ETF) EEM Thursday.

Somebody sold 64,500 contracts of the June 39 strike puts and bought 64,500 contracts of the June 46/48 call spread. The trader is willing to own a quarter of a billion position in iShares MSCI Emerging Markets Indx (ETF) at $39 and he or she is going to have to own it, if the stock trades below $39 at the June expiration. The trade is going to make money, if the stock trades above $46 at the June expiration. Profit is capped at $48 and the call spread can't make more than $2.