Dan Nathan's PowerShares QQQ Trust, Series 1 (ETF) Trade

Dan Nathan spoke on CNBC's Options Action about an options strategy in PowerShares QQQ Trust, Series 1 (ETF) QQQ. He said that the largest tech companies have outperformed in the last year and it looks to him like they have become a crowded trade.

Going into the earnings for the largest tech companies, Nathan would consider using options to buy protection. He wants to buy the July 132/120 put spread for $2.50. The trade breaks even at $129.50 or 2.31 percent below the current market price. If the stock drops 9.47 percent to $120, he is going to achieve his maximal profit of $9.50.