Dan Nathan Sees Unusual Options Activity In Applied Materials

Speaking on

, Dan Nathan said that

had 6 times average daily call volume on Thursday. Around 90 percent of the volume was in the call options. A large trade caught Nathan's attention in the morning session. A trader bought 20,000 of the February 27, 24 - strike calls for $0.87. The breakeven for the trade is at $24.87, so by the end of the day these options were in the money. Nathan said that the company reported earnings last week and the stock has been trading in a range. It is now trading on a verge of a massive breakout, thinks Nathan. He added that if the rumors about Tokyo Electronic deal are true, there could be massive cost cuts in the first year and this could be a catalyst for the stock.