Dan Nathan Sees Unusual Options Activity In Twitter

Dan Nathan said on CNBC's Options Action that there was not much going on in options market in Twitter Inc TWTR on Monday. He noticed a purchase of 500 contracts of the July 2 weekly 42 calls for $0.18. Nathan explained that the market believes that there is only 10 percent chance that this option is going to expire in the money. The chart of Twitter caught Nathan's attention because the 50-day moving average crossed 200-day moving average. He explained that this bearish pattern is called the "death cross" and it usually works very well. The stock is also trading close to its one-year support at $35 and Nathan has a long position because he feels that the stock is getting oversold. He suggested getting long with options because of the possible negative impact of the "death cross" pattern.