Dan Nathan Sees Unusual Options Activity In Avon Products, Inc.

, Dan Nathan spoke about unusually high options trading in

. The stock traded sharply higher on Thursday around 1:45 pm, when the Wall Street Journal published a story that the company is considering selling itself to private equity. Option traders started to buy the September 4.5 calls on the news and around 2,000 contracts were traded at an average price of $0.20. After the stock moved higher, the September 4.5 call traded to $0.70, but it soon returned to $0.20 as the stock pulled back. Nathan thinks that

is a very distressed company that is probably going to $0. He added that he doesn't like buying short dated calls on headlines because they often surrender gains.