Scott Nations' Natural Gas Trade

On CNBC's "Futures Outlook," Scott Nations said he would fade a move higher in natural gas.

The commodity traded higher as Hurricane Sally made its way towards Louisiana, but Nations sees some bearish signs. He is a skeptic because the initial gains haven't held and crude oil hasn't traded up at all. If you look at the options market, you will see that nearly 5 puts are trading for each call, said Nations.

He wants to sell the October futures contract in natural gas. His entry price would be at $2.40 and he would place a stop loss at $2.50. His target price would be at $2.10. Nations said he would watch the trade very carefully and he suggested it might be better to use options to make a bearish bet in natural gas.