Benzinga | Jan 10, 2021 03:11PM EST

Carter Worth And Mike Khouw Map Out Way To Play Deere & Co. Against Dollar Bounce

On CNBC's "Options Action," Carter Worth compared the move in the U.S. dollar with moves in the commodity sector and in Deere & Company (NYSE:DE). The U.S. dollar is in a free fall, while commodities and Deere are trading sharply higher, he said. The U.S. dollar has dropped to levels last seen in 2017-2018, and Worth expects it to bounce off the lows and move back to the trend line, which is 3% to 4% above the current price level. Worth believes a potential move higher in the U.S. dollar would hurt commodities and Deere, and he wants to sell the stock and commodities.

Mike Khouw suggested a bearish options trade in Deere. He wants to buy the March $290 put for $15 and sell the February $280 put for $7.75. The trade would cost him $7.25 which would set the break-even at $282.75, or about 3.8% below the current stock price.