Pete Najarian Sees Unusual Options Activity In Rio Tinto

Pete Najarian said on CNBC's Fast Money Halftime Report that there was huge options activity in Rio Tinto plc (ADR) RIO on Wednesday. He noticed in the first half of the session that traders have purchased 5,800 contracts of the March 47.50 calls for an average price of $1.20.

The trade breaks even at $48.70 or 6.42 percent above the current market price. Najarian decided to follow the trade and he is planning to hold the position for a couple of weeks. He thinks it's better to own calls than shares in Rio Tinto, because it's possible that the stock could pull back after the recent rally and with options traders can only lose the premium that they have paid.