Dan Nathan's Citigroup Trade

Dan Nathan spoke on CNBC's Options Action about a bearish options strategy in Citigroup Inc C.

The banking sector traded sharply higher on expectations of deregulation and higher interest rates, but it showed some signs of weakness last week. Nathan thinks the current administration won't be able to change meaningfully the Dodd-Frank Act over the next few months and he sees that as the key catalyst for a possible pull back in the banking sector.

Nathan wants to buy the April 60/55 put spread in Citigroup for a total cost of $1. The break even for the trade is at $59 or 2.27 percent lower and it can maximally make a profit of $4.