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Mike Khouw's FedEx Options Trade

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On CNBC's "Options Action," Mike Khouw spoke about unusually high options activity in FedEx Corporation (NYSE: FDX). The company is going to report earnings on Tuesday and Khouw wants to use a risk reversal options strategy to bet that the stock is going to move higher.

He wants to sell the Jan. $160 put for $6.25 and use the proceeds to buy the January $180/$200 call spread. The trade breaks even at $180 and it can maximally make a profit of $20. If the stock drops below $160 at the January expiration, Khouw is going to have to buy it for $160.

Posted-In: CNBC Mike Khouw Options ActionPreviews Options Markets Media Trading Ideas

 

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