Dan Nathan Sees Unusual Options Activity In Consumer Discretionary SPDR (ETF)

On CNBC's Options Action, Dan Nathan spoke about unusually high options activity in Consumer Discretionary SPDR (ETF)XLY. The options trading volume in the ETF on Monday was 10 times higher than the average daily options trading volume and Nathan believes that the largest trade in the session was a hedge for a consumer discretionary stock.

Nathan noticed that a trader sold to close 20,000 contracts of a March put spread and he bought 30,000 contracts of the June 69/61 put spread for $2.10. The trade breaks even at $66.90 or 10 percent lower from the closing price on Monday. The trader can maximally make $5.90 with this trade.