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Dan Nathan's Utilities SPDR Trade

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On CNBC's "Options Action", Dan Nathan suggested investors should consider a bearish options strategy in Utilities SPDR (NYSE: XLU).

For most of the year, the stock was tracking the performance of the S&P 500, but there has been a bit of the divergence over the last couple of months, said Nathan. He believes this trading action doesn't make a lot of sense and he expects to see a pullback in Utilities SPDR.

To make a bearish trade, Nathan wants to buy the March 55/49 put spread for $1. The trade breaks even at $54 or 4.36 percent below the current market price and it can make a maximal profit of $5.

Posted-In: CNBC Dan Nathan Options ActionOptions Markets Media ETFs

 

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