Alon Rosin's SPDR S&P 500 ETF Trust Trade

Alon Rosin of Oppenheimer & Co. said on Bloomberg Markets that investors should consider a bearish options strategy in SPDR S&P 500 ETF Trust SPY.

He wants to buy the 1 to 1.5 put spread ratio. Specifically, he wants to buy the September 235 put and sell 1.5 September 220 put for a total cost of $1.10. The trade breaks even at $233.90 or 4.14 percent lower. It can maximally make a profit of $13.90, if the stock drops to $220. Below $220, the trade starts to lose money. Rosin explained that he likes the structure mainly because of the skew. The out of the money puts are more expensive than the at the money puts.