Dan Nathan Sees Unusual Options Activity In SolarCity

Dan Nathan spoke on CNBC's Options Action about unusually high options activity in SolarCity Corp SCTY on Wednesday. He explained that put options volume was 10 times higher than the average daily put volume and the largest trade of the day was a purchase of the October expiration puts.

A trader bought 2,000 contracts of the October 22 puts for $4.80. The breakeven for the trade is at $17.20 or 21.39 percent lower than the closing price on Wednesday. Nathan said that if the deal between Tesla Motors Inc TSLA and SolarCity doesn't go through, the stock is going to trade much lower and he thinks that it is not a good idea to be long premium in a stock like SolarCity.