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On
CNBC's Options Action, Dan Nathan spoke about a large bearish options trade in
Under Armour IncUA. The stock fell 1.11 percent on Wednesday in a sympathy move to
Lululemon Athletica inc.LULU, which announced a guidance cut and dropped 13.12 percent.
Nathan explained that the stock didn't react so badly, but the put volume was two times higher than the average daily put options volume. When the stock was trading at $87, a trader bought 8,000 contracts of the January 55 puts for $0.05. The options market is saying that there is only a 1 percent probability that these options are going to expire in the money.
The breakeven for the trade is at $54.95 or 36 percent lower from the current price. Although Nathan believes that there could be some weakness ahead in the stock, he wouldn't reach out and buy the January 55 puts to make a bearish bet.
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