Todd Gordon's Emerging Markets ETF Options Trade

On CNBC's Trading Nation, Todd Gordon recommended a bearish options strategy in iShares MSCI Emerging Markets Indx (ETF) EEM. He said that the ETF is under pressure because of weak commodity prices and strong U.S. dollar. He explained that falling bond prices have caused a rally in the U.S. dollar.

Gordon added that iShares MSCI Emerging Markets Indx (ETF) broke below its uptrend line and he thinks that it would be a good idea to take a short position in the name. He wants to do that with a purchase of the December 34/32 put spread for $0.51.

The breakeven for the trade is at $33.49 and if the stock drops to $32, Gordon would make a maximal profit of $1.49. If the premium drops to $0.25, he would close the position.