Chris Kettenmann's Energy Select Sector SPDR Trade

Chris Kettenmann, the chief energy strategist at Macro Risk Advisors, spoke on Bloomberg Markets about a bearish options trade in Energy Select Sector SPDR (ETF) XLE.

He said he turned bullish since September, but crude oil has moved so fast that he is already stepping back to the sidelines. At November 30, there is going to be an OPEC meeting and Kettenmann thinks that the market is running too high going into the event.

He believes the best way to trade the event is with a put calendar. He wants to sell the November 67 put for 6 cents and buy the December 67 put for $0.59. The total cost for the trade is $0.53 and in an ideal scenario, the stock has to stay above $67 at the November expiration and then is should drop below $66.41.