Mike Khouw's FedEx Corporation (FDX) Trade

CNBC Options Action's Mike Khouw talked on the show about an options strategy in FedEx Corporation FDX. He explained that FedEx (FDX) benefited, as online retailers have had a successful month. In the last eight quarters, FedEx (FDX) traded up 3 times, and it traded down five times. On this earnings season, options markets are implying a 3.3% move. Mike Khouw concluded that FDX options look cheap, and he recommended a put spread. He wants to sell the January 85 put for $1.10 in FDX, and buy the January 90 call for $2.30. This trade would cost him $1.20, which is less than a quarter of the potential value of this put spread. FedEx (FDX) fell 1.80%, and closed at $93.29. It had a volume of 2.32M traded shares.