Dan Nathan Sees Unusual Options Activity In Twitter

On CNBC's Options Action, Dan Nathan spoke about unusually high bullish options activity in Twitter Inc TWTR. He said call options volume on Tuesday was two times higher than put options volume and also two times higher than the average daily call options volume.

Nathan noticed a trader bought 2,500 contracts of the January 17, 20 strike calls for $1.25. The breakeven for the trade is at $21.25 or 38 percent higher at the January 2017 expiration. He explained that the trader is buying calls because he or she probably believes there is a chance for a takeover.