Dan Nathan's Salesforce Trade Ahead Of Earnings

CNBC Options Action's Dan Nathan said on the show that the options market is implying around a six percent one-day move for salesforce.com CRM versus the average move over the last four quarters of seven percent.

That is a big move for a company of $33.75 billion market cap and Nathan is looking to trade it using straddle.

The August 55 weekly call was offered on Wednesday at $1.65 and the August 55 weekly put was also offered at $1.65. This trade would cost $3.30 and that is around six percent of the underlying. The breakevens for the trade would be at $51.70 and $58.30.

Salesforce has a very high valuation, but it is also a very fast grower. The stock has not participated in the NASDAQ's rally and if the company raises guidance on Thursday, Nathan thinks that it could trade sharply higher. Any bad news on the earnings call would be met by further selling, and in that case, the stock could trade around $50.

Salesforce gained 0.78 percent Wednesday and closed at $55.39.