SPDR S&P 500 ETF Trust Options Trade

Pravit Chintawongvanich of Macro Risk Advisors spoke on Bloomberg Markets about a bearish options trade in SPDR S&P 500 ETF Trust SPY.

He's watching how expensive are put options relative to call options in the ETF and he concluded that as the market trades higher, call options are getting more expensive than puts. To exploit the situation, Chintawongvanich wants to sell the May 245 calls and buy the May 225 put for a total credit of $0.13.

He explained that he isn't bearish on the market, but he thinks there could be a pull back. The trade is going to lose money if SPDR S&P 500 ETF Trust trades above $245.13 at the May expiration. It's going to make $0.13, if the stocks stays between $245 and $225 and it can make additional money if SPDR S&P 500 ETF Trust drops below $225.