4 trades on China's continued selloff

Investors look at computer screens showing stock information at a brokerage house in Shanghai, China.
Trading China's selloff: 4 protection plays   

China's continued stock market battering opens a window to short commodities, CNBC "Fast Money" trader Brian Kelly said.

The Shanghai Composite slipped nearly 6 percent Wednesday, bringing its losses to more than 30 percent from its mid-June peak. Chinese demand concerns added to the mounting pressure on U.S. oil prices, and the commodity took a dive of more than 1 percent for the day.

Read MoreAsian stocks sink as China, Greece fears rattle investors

"I think you stay short oil," said Kelly, adding that shorting commodities was one of "the easiest ways for a U.S. investor" to take advantage of the Chinese situation.

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Alcoa—a commodities player with a hand in China—marked the unofficial start of earnings season with mixed quarterly results. In a CNBC interview, the company's CEO Klaus Kleinfeld said a slowing Chinese economy could hold back growth.

Read MoreAlcoa kicks off earnings season with mixed results

Trader Dan Nathan sees little "silver lining" around Alcoa currently. Alcoa shares—which have fallen more than 33 percent this year—could have more downside, trader Pete Najarian added.

If China's A-Shares mount any kind of rally, trader Dan Nathan would look to short them through the Deutsche X-trackers Harvest CSI 300 China A-Shares Fund.

He noted, though, that a trader would have to be "nimble" to execute the short.

Disclosures:

Pete Najarian

Long AMAT, AAPL, BABA, BAC, BMY, BP, CSX, DISCA, DKS, FOXA, GE, KKR, KO, LLY, MRK, PEP and PFE. He is long calls AAPL, ABX, BAC, BBY, C, CY, DAL, ETFC, FCAU, GS, HYS, INVN, JPM, LULU, LVS, MYL, NUAN, OC, PNR, S, SPY, SXC, SYY, TSLA, UAL, UBS, USB, VOYA, VZ, WYNN, XLF and ZIOP. Today, he bought MYL calls.

DAN NATHAN

Dan is long JPM July put spread, TJX Aug put, TWTR, TWTR SEPT call spread, SO, INTC long July put, LVS long July Aug put spread and WDAY long July call fly. He is short SO Aug call. Today, he sold MSFT July call fly.

STEVE GRASSO

Steve Grasso is long AAPL, BA, BAC, DD, DECK, EVGN, FIT, KBH, MJNA, PFE, PHM, T, TWTR and GDX. His firm is long OXY, NE, RIG, FCX and WYNN. His kids own EFG, EFA, EWJ, IJR and SPY.

BRIAN KELLY

Brian Kelly is long BBRY, BTC=; TAN, TLT, TSL, euro, yuan and yen. Today, he sold U.S. 30-year bonds

KAREN FINERMAN

Karen is long BABA, BAC, C, FINL, FL, GOOG, GOOGL, JPM, KORS, M, URI and BABA puts. She is short SPY. Her firm is long ANTM, AAPL, BAC, C, CVS, DIS, FBT, FINL, FL, GOOG, GOOGL, GPS, IBB, JPM, KORS, M, SUNE, URI, XBI, KORS call spreads, URI calls, KORS puts and SPY put spreads. Her firm is short IWM, SPY and MDY. Karen Finerman is on the board of GrafTech International. Today she bought BABA puts.