CNBC Options Action's Dan Nathan spoke on the show about bearish options activity in Facebook Inc FB ahead of earnings.
The options market is implying a move of around 6.5 percent, which is the average over the last four quarters. One trade caught Nathan's attention on Tuesday. A trader bought 1,500 contracts of the February 69 puts for $0.93. The trade breaks even at $68.07 or 10 percent lower from the current market price.
Nathan believes that this trade is a protection for a possible disaster that could happen if the company misses the estimates on its earnings report.
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