Dan Nathan Sees Unusual Options Activity In Walt Disney Co

On CNBC's Options Action, Dan Nathan analyzed options trading activity in Walt Disney Co DIS. He noticed that put options activity was unusually high on Tuesday and he said that puts outnumbered calls 4 to 1.

When the stock was trading at $95.40, there was a buyer of 15,000 contracts of the April 90/85 put spread for $0.85. Nathan explained that a trader paid $1.28 million in premium and he added that the trade breaks even at $89.15 or approximately 6.5 percent lower from the current stock price.

The trader can maximally make $4.15 or $6.2 million, if the stock drops 11 percent to $85. Nathan believes that this trade is a protection for a long position.