Dan Nathan's AT&T Trade

Speaking on CNBC's "Options Action," Dan Nathan suggested investors with a long position in AT&T Inc. T should consider a covered call strategy.

Nathan wants to sell the October 39 call for 38 cents against a long stock position. With the sale of the stock, he can increase his yield for additional 1 percent in just two months, which offers some downside protection. His selling price is capped at $39.38, or 5.39 percent above the current stock price.