Chris Kettenmann's Bearish Energy ETF Trade

Chris Kettenmann of Macro Risk Advisors shared with the viewers of Bloomberg Markets his bearish options strategy in Energy Select Sector SPDR (ETF) XLE.

He wants to sell the January 2018, 68 strike call and buy the October 62 put for a total credit of 59 cents. If the stock stays below $68 at the January expiration, Kettenmann is going to collect the premium. The trade starts to lose money above $68.59 and it can make additional profit, if the stock drops below $62 at the October expiration.