Dan Deming's SPDR S&P 500 ETF Trust Trade

Speaking on Bloomberg Markets, Dan Deming of KKM Financial suggested that investors should consider buying protection in the current market environment.

He is watching the CBOE skew index, which measures the demand for downside puts versus upside calls and he noticed that it reached a record high last Friday. He explained that the rise of the CBOE skew index means some institutional players feel that there could be a significant pull back ahead.

Deming would buy the June 230/225 put spread in SPDR S&P 500 ETF Trust SPY for approximately $1.18. The trade breaks even at $228.82 or 2.23 percent lower and it can maximally make a profit of $3.82, if the stock drops to $225 or lower.