Dan Nathan Sees Unusual Options Activity In MGM Resorts International

On CNBC's Options Action, Dan Nathan spoke about unusually high bullish options activity in MGM Resorts International MGM. Options trading volume was four times higher than the average daily volume and one trader made a bullish bet of more than $4 million that the stock is going to continue to move higher.

When the stock was trading at $20.60, the trader sold to close 20,000 contracts of the September 20 calls for $0.71 and bought 20,000 contracts of the December 20 calls for $2.16. Total premium was $4.3 million and the trade breaks even at $22.16 or 4.5 percent higher from the current price of the stock and 7.5 percent higher from the trading price at the moment of initiation of position.

Nathan added that implied volatility for MGM Resorts has declined and this trade is a way to participate on the upside using cheap options.