Todd Gordon's Bearish USO Trade

On CNBC's "Trading Nation", Todd Gordon of TradingAnalysis.com suggested that investors should consider a bearish options strategy in United States Oil Fund LP (ETF) USO.

Gordon believes that bearish EIA data and a technical position of the market could push the stock lower. He thinks that it might reach $9.50. Gordon noticed that RSI is around 70 and whenever it reached that level in the past the stock reached a top and turned lower. To make a bearish bet, he wants to buy the August 10.50 put for 49 cents. The trade breaks even at $10.01 or 1.28 percent below the current stock price. If the premium paid gets cut in a half, Gordon is going to close the position.