Carter Worth And Mike Khouw's SPDR S&P Retail ETF Trade

Carter Worth spoke on CNBC's Options Action about the retail sector and its ETF, SPDR S&P Retail (ETF) XRT.

He identified a head and shoulders pattern in the ETF and he believes it's going to fail to beat the resistance at $45 and head lower.

To make a bearish bet, Mike Khouw suggested an options strategy. He wants to buy the December 45 put in SPDR S&P Retail (ETF) for $1.90. The trade breaks even at $43.10 or 4.22 percent lower from the current stock price. He added that the premium is not cheap relative to the cost of XRT, but if it trades lower he would sell a put and create a put spread.