Carter Worth And Mike Khouw's Regional Bank Trade

On CNBC's "Options Action," Carter Worth of Cornerstone Macro suggested investors should consider making a bullish bet in regional banks.

He analyzed a chart of SPDR S&P Regional Banking ETF KRE and noticed it broke above its 150-day moving average. He thinks this change in trend is important and he sees it as the beginning of a move higher. Worth has also noticed KRE significantly outperformed the S&P 500 in October and he thinks the outperformance is likely to continue.

To make a bullish bet, Mike Khouw wants to sell the November $43 call for $1.15 and buy the January $43 call for $2.25. He is hoping the stock is going to stay below $43 at the November expiration and then rally above $44.10.