Dan Nathan's General Motors Trade

Dan Nathan shared with the viewers of CNBC's "Options Action" his bearish options strategy in General Motors Company GM.

The stock gained 20 percent in the last month, while the other stocks in the sector traded only 7 percent higher. Nathan believes that General Motors is overbought. He thinks the stock is heading towards $40 and he wants to buy the November 44/40 put spread for $0.80.

The trade breaks even at $43.20 or 3.85 percent below the current stock price. If General Motors drops to $40 or lower at the November expiration, the trade is going to reach its maximal profit of $3.20.