Dan Nathan's SPDR S&P Homebuilders Trade

Dan Nathan spoke on CNBC's "Options Action" about a bearish options trade in SPDR S&P Homebuilders XHB. He is bearish because the recent new home sales were bad, despite the decrease in interest rates. Its chart also looks bad as the stock failed to break above its 52-week high and it fell below its trend line.

To make a bearish bet, Nathan wants to buy the September 40/35 put spread for $1.25. The trade breaks even at $38.75 or 2.56 percent below the current stock price.