Dan Nathan's Utilities SPDR ETF Trade

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

The stock caught his attention, because he noticed a big put options volume last week in the name. He thinks traders should not be in the stock ahead of a possible rate hike.

Nathan believes options in Utilities SPDR (ETF) are cheap at the moment. To make a bearish bet, he wants to buy the April 51/47 put spread for $1. The trade breaks even at $50 or 2.95 percent below the current stock price and he can maximally make a profit of $3.

Nathan explained that the stock is trading close to its technical resistance and he thinks there is a strong support around $48, which is close to his target.