Dan Nathan Sees Unusual Options Activity In Oil & Gas ETF

Dan Nathan spoke on CNBC's Options Action about high options trading activity in SPDR S&P Oil & Gas Explore & Prod. (ETF) XOP on Wednesday.

He said that calls outnumbered puts 3 to 1 and when the stock was trading at $37.15, there was a buyer of 11,000 contracts of the April 38.50 calls for $0.21. The trade breaks even at $38.71 or 3.89 percent higher.

Nathan analyzed a chart of SPDR S&P Oil & Gas Explore & Prod. (ETF) and he noticed that the stock is trading at an important intersection between down trend line and up trend line. He added that if it fails to trade higher, there could more downside in the name.