Todd Gordon's Retail ETF Trade

On CNBC's "Trading Nation", Todd Gordon suggested that traders should consider a bullish options trade in SPDR S&P Retail (ETF) XRT.

He thinks the stock is trading at support and he believes it's going to trade higher. He explained that implied volatility in the name is elevated and he wants to sell puts to make a bullish trade. Gordon wants to sell the September 39 put and buy the September 35 put. The sale of the put spread would allow him to generate a credit of 84 cents. If the stock trades above $39 at the September expiration, Gordon is going to collect the premium. Below $38.16, the trade starts to lose money and it can maximally lose $3.16. If the stock drops below $38, Gordon is going to close the trade.