Tony Zhang's Northrop Grumman Trade

Tony Zhang of OptionsPlay spoke on CNBC's "Options Action" about Northrop Grumman Corporation NOC. He said the stock has broken below some major support levels and there could be further downside.

To make a bearish bet, Zhang wants to sell the October $350 call and buy the October $365 call in Northrop Grumman for a total credit of $6.10. If the stock trades below $350 at the October expiration, Zhang is going to collect $6.10. The trade starts to lose money above $356.10 and it can maximally lose $8.90.