Mike Khouw: Here's When Traders Expect Lockheed Martin To Rebound

Lockheed Martin Corporation LMT tumbled 11.8% to settle Tuesday's session at $331.91, after the company reported a year-on-year decline in its third-quarter net sales and net earnings from continuing operations.

Despite this, there were bullish bets on the defense contractor in the options market. On CNBC's "Options Action," Mike Khouw said the stock traded a whopping 15 times its 20-day average volumes.

Most of the bullish options trading was focused on the weekly 340 and 350 strike calls, Khouw mentioned. An example of this was 200 of the November 5 weekly 350 calls at 75 cents per share. Traders took advantage of the lower stock price and lower options premium and the action shows expectations of the stock rebounding by the end of next week.