Todd Gordon's SPY Hedge

On CNBC's "Trading Nation," Todd Gordon of Ascent Wealth Partners suggested an options strategy that offers some protection for long stocks portfolio.

He wants to buy the July $225/$200 put spread in SPDR S&P 500 ETF Trust SPY for $3.16. The options structure breaks even at $221.84 or around 25% below the closing price on Thursday. If the stock drops to $200 or lower at the July expiration, the hedge would reach its maximal profit of $21.84.

Gordon explained that investors don't have to wait until expiration because it's possible to sell the spread and close the position before it expires.

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