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Here's how to position your portfolio for the Fed: Trader

Here's how to position your portfolio for Fed: Trader

The Dow and fell again in early trading Friday after a mixed jobs report kept a Fed rate hike for this month on the table—U.S. unemployment hit a seven year low, but job creation fell short of expectations at 173,000 in August versus the 220,000 estimate.

With less than two weeks until the Fed meeting, one trader is positioning his portfolio for further volatility in the stock market.

Read MoreS&P hovers near correction; Dow plunges triple digits after jobs

"I think the trend here is down," Todd Gordon said Thursday on CNBC's "Trading Nation." Stocks have been bouncing in and out of positive territory since its initial selloff last week. "You don't want to be long here because we I think we are going to [continue] to roll over."

Looking at a chart of the SPY, the ETF that tracks the S&P 500, Gordon noted that "we have broken through key support at $204, which is now serving as resistance." For Gordon, even as stocks have found some rallies in recent sessions, this will be a difficult level for it to break though. The SPY was trading around $193 early Friday.

Read More Aug jobs report highlights reason for recent stock drops: Paulsen

"I want to sell options above that resistance level as it will give me the highest probability of success," added Gordon, founder of Specifically, Gordon sold the SPY October 202/205 call spread for $1.09 credit. This is a bearish strategy in which a trader will sell a call and then buy a higher strike call of the same expiration. The goal is to have the stock, or in this case ETF, stay below the strike that you are short. Gordon's trade is profitable if the SPY remains below $202 by October expiration.

"I am confident in these resistance levels as reason to be short," he said.

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