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Something rare is happening in the market with the VIX: Trader

The market has stayed relatively flat this summer, and it's causing something very rare with the VIX.

According to Optimize Advisors' chief strategist, Mark Khouw, the current levels of the CBOE Volatility Index are so uncommon that they have only happened a handful of times in history.

"One of the reasons why the VIX has gotten this low is because the market just hasn't been moving around," he said Friday on CNBC's "Options Action." "For the month of August, we reached realized volatility levels that have only been seen three weeks since 1970."

In other words, options are also the cheapest they have been in a very long time.

To take advantage of the current market and low volatility, Khouw suggested buying January 220-strike calls in the S&P 500-tracking ETF SPY for $5.25, or $525 per options contract.

This is a bullish bet that the SPY would rise above $225.25 by the start of next year. It may seem like a big bet, but Khouw points out that it's actually not too much of a long shot given where the S&P 500 is currently trading.

"Basically, if the S&P is up 3 plus 4 percent, something in that neighborhood by next January, this is a trade that's going to be profitable," said Khouw.

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    Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

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