Mike Khouw Sees Unusual Options Activity In Nasdaq 100

Mike Khouw spoke on CNBC's Options Action about an unusual options activity in NASDAQ 100 NDX. He said that four times average daily put volume was traded in NASDAQ 100 on Wednesday and it is unusual that the largest trade on a pretty volatile day was the sale of a bullish put spread. Somebody sold 41,500 contracts of the October 3,625 / 3,600 put spread for a credit of $0.60. The trader took a credit of just under $2.5 million. Khouw added that maybe it was the same trader who sold 50,000 put spreads of S&P 500 INDEX SPX. Traders behind these trades believe that the worst is behind us. Khouw explained that traders use this strategy when they are not very concerned that the price is going to decline to the lower strike.