Dan Nathan's SPDR S&P 500 ETF Trust Hedge

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On CNBC's Options Action, Dan Nathan spoke about a hedging strategy in SPDR S&P 500 ETF Trust SPY. He named the debt ceiling vote, the French election and the Fed's activity as possible catalysts that could push the market lower and since the implied volatility is low, he wants to buy options to protect his long position from a potential decline.

Nathan wants to buy the July 230/205 put spread for $4. The trade breaks even at $226 or 3.26 percent lower from the closing price on Monday. If the stock drops 12.25 percent to $205 or lower, the trade is going to reach its maximal profit of $21.

Posted In: CNBCOptionsMarketsMediaETFsDan NathanOptions Action
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