Mike Khouw's Technology SPDR (ETF) (XLK) Trade

Mike Khouw talked on CNBC's Options Action about an options strategy in Technology SPDR (ETF) XLK. He spotted unusually high options activity in this name. Somebody bought 100,000 January 26 calls for $0.21 per option, and that represents 10,000,000 shares. Mr. Khouw recommended investors to follow that strategy, and it will be profitable if XLK trades above $26.21 at expiration. Microsoft MSFT, Apple AAPL, Google GOOG, Intel INTC and International Business Machines Corp. IBM are all in XLK, and they are going to report earnings before the expiration of January calls. The least volatile stock in this group is IBM, and it implies a move of 3%. Technology SPDR (ETF) XLK gained 0.89% today, and closed at $25.96.