Dan Nathan Sees Unusual Options Activity In SPDR S&P Retail

On CNBC's "Options Action", Dan Nathan spoke about high put options activity in SPDR S&P Retail XRT. He explained that puts outnumbered calls 3 to 1 on Tuesday and there was one trade that caught his attention.

When the stock was trading around $45, there was a buyer of 4,000 contracts of the June 44/41 put spreads, paying around $0.70 for them. The trade breaks even at $43.30 or 3.52 percent below the closing price on Tuesday. The maximal profit for the trade is $2.30 and it can be achieved if the stock drops to $41 or lower.