Dan Nathan Sees Unusual Options Activity In Starbucks

Dan Nathan spoke on CNBC's "Options Action" about an unusually high options activity in Starbucks Corporation SBUX. He said the options volume on Monday was 1.5 times its average daily options volume.

When the stock was trading at $76.25, Nathan noticed a purchase of 5,000 contracts of the May 75/77.5 strangles for $2.80. He explained that this was a volatility trade and the trader is looking for a move below $72.30 or above $80.30 by the May expiration. The company is going to report earnings next week.