Dan Nathan's Hewlett-Packard Company (HPQ) Trade

On CNBC's Options Action, Dan Nathan said that he is watching Hewlett-Packard Company HPQ. He said that Hewlett-Packard Company (HPQ) is going to report earnings next week, and the options market is implying a 4% move. On earnings, it has moved 3% on average over the last eight quarters, and only 1.5% over the last four quarters. Dan Nathan wants to use a put calendar in order to place a bearish bet on Hewlett-Packard Company (HPQ). He wants to sell the December 40 put for $0.65, and buy the January 40 put for $1.05. This trade would cost him $0.40, and HPQ has to close above short-strike at December expiration, and above long-strike at January expiration. Hewlett-Packard Company (HPQ) closed 1.92% higher on Friday, at $42.49.