Mike Khouw Sees Unusual Options Activity In Freeport-McMoRan

On CNBC's "Options Action," Mike Khouw said Freeport-McMoRan Inc FCX traded about 2.5 times its average daily call volume on Tuesday and calls outpaced puts also by about 2.5 to 1. That was a result of a lot of activity in the December $33 and the December $40 calls.

During the session, he noticed a purchase of 16,000 contracts of the December $33/$40 call spread for $1.45. The trade breaks even at $34.45 or 13.02% above the closing price on Tuesday. It looks like this institutional trader is targeting the highs last seen in August, said Khouw.