Kevin Kelly's S&P 500 INDEX Trade

Kevin Kelly of Recon Capital Partners suggested on Bloomberg Markets that investors should consider buying protection in S&P 500 Index because VIX is trading close to its lows.

Kelly wants to use options to hedge and he wants to buy the September 2190 put in the S&P 500 INDEX (SPX) for $32.60 and sell the September 2070 put for $9.70, paying $22.90 for the spread. The trade breaks even at $2167.1 and it can maximally make $97.1. It offers a protection of around 5 percent and it costs around 1 percent of current value of the index to set up the trade.