Dan Nathan's Energy ETF Trade

Speaking on CNBC's "Options Action", Dan Nathan suggested that traders should consider a bearish options strategy in Energy Select Sector SPDR (ETF) XLE.

He thinks that the stock is heading lower and he wants to buy the October 64/60 put spread in Energy Select Sector SPDR (ETF) for $1. The trade breaks even at $63 or 2.17 percent below the current stock price. It can make a maximal profit of $3.