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Dan Nathan's Health Care SPDR (ETF) Trade

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Dan Nathan's Health Care SPDR ETF Trade

Speaking on CNBC's "Options Action," Dan Nathan suggested traders consider a bullish options strategy in Health Care SPDR (ETF) (NYSE: XLV). He explained that the sector is underperforming the rest of the market, and he believes it has potential to recover and catch up with the rest of the market.

Nathan thinks there could be more room on the downside for XLV, but it is limited to a drop of 3.5 percent to $66. To make a bullish bet, he wants to sell the January 66 put and buy the January 70 call for a total credit of $0.05. If the stock stays above $66 at the January expiration, he is going to collect the premium and he will have additional profit if the ETF trades above $70.

Posted-In: Analyst Color Long Ideas Sector ETFs Options Markets Analyst Ratings Media Trading Ideas

 

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