Carter Worth And Mike Khouw's XLP Trade

On CNBC's "Options Action," Carter Worth spoke about Consumer Staples Select Sector SPDR Fund XLP. It has been a very bad performer relative to the market, but it is starting to base and actually outperform the S&P 500, said Worth. He noticed a double bottom pattern and a breakout above the downtrend on the relative performance line. Worth expects XPL to move to $73 or $74.

To make a bullish bet, Mike Khouw wants to buy the September $71 call for $2.15. The trade breaks even at $73.15 or 3.16% above the closing price on Friday. With the trade, Khouw is risking only around 3% of the stock price.