Dan Nathan's Utilities SPDR (ETF) Trade

On CNBC's Options Action, Dan Nathan suggested a bullish options strategy in Utilities SPDR (ETF) XLU.

He showed a 10-year chart of the stock and explained that it has been trading in an uptrend for a long time. It is now resting at its trendline and Nathan expects that it could move higher. He wants to buy the October 42 call for $0.60 and sell the October 44 call for $0.10. The call spread would cost him $0.50 and if the stock trades to $44 his maximal profit is going to be $1.50. The breakeven for this trade is at $42.50.