Options Action Traders Expect A Correction In Europe

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Carter Worth And Mike Khouw
suggested to the viewers
of CNBC's Options Action to consider a bearish options strategy in
iShares MSCI Germany Index Fund (ETF)EWG
. Worth analyzed EWG from a technical stand point and he said that the ETF broke its trend line for the first time, which is a bearish sign. He added that the spread between the EWG and the S&P 500 is increasing and that we could see a decline of ten percent in this stock. He suggested that the viewers with a long position should take profits. Mike Khouw said that it is hard to take a short position in EWG after the recent ECB's decision to lower rates. He feels that the problems in Europe are big and that current measures are not enough. He wants to use options to set up a bearish trade. Specifically, he wants to buy the January 29 puts, which cost $1.10. The breakeven for the trade is at $27.90
Posted In: CNBCMediaCarter WorthMike Khouw
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