Dan Nathan Sees Unusal Options Activity In Twitter Inc

Dan Nathan spoke on

about unusually high options activity in

on Monday. The company is due to report earnings on Tuesday and the options market is implying a 11 percent one day move. Nathan added that the stock has moved 16 percent on average over the last 5 quarters. Nathan noticed one big trade on Monday. A trader bought 2,000 contracts of the May 39.50 put options for $0.10. The trade breaks even at $39.40 or approximately 24 percent lower from the current price. Nathan explained that the options market is pricing in only a 5 percent chance that this option expires in the money. He added that this is not usually a good way to trade options. Nathan has a long stock position in

and he is going to close it and buy a call spread to limit his risk.