Dan Nathan Sees Unusual Options Activity In Walt Disney

On CNBC's Options Action, Dan Nathan spoke about unusually high options activity in Walt Disney Co DIS. The company is going to report earnings on Tuesday and the implied move in options market is around 3 percent, while the average move over the last four quarters is 2.5 percent.

The options volume was very high as six times average daily volume was traded. Nathan noticed one large trade in the name, when it traded at $121. A trader bought 8,500 contracts of the August 115 put for $0.68, which is $578,000 of premium. The trade breaks even at $114.32 or approximately 5.5 percent from the current market price.

Nathan added that implied volatility in Disney is relatively low. It is below levels it moves around when the company reports earnings. He believes that this trade could be a cheap protection for a long position that did well so far.