Mike Khouw's Peabody Energy Corporation (BTU) Trade

On CNBC's Options Action, Mike Khouw talked about an option strategy in Peabody Energy Corporation BTU. He said that you can still sell options when everybody is talking about declining volatility. In these situations, he is watching the companies that are relatively under performing, but are still fundamentally strong. Mike Khouw wants to sell the September 60 puts in Peabody Energy Corporation (BTU) for $2.75, which is 4.5% of the current value of the stock. If the stock stays above $57.25 until the expiration, the strategy would be profitable. Peabody Energy Corporation (BTU) gained 0.39%, and closed at $61.22.