We’ve opened a bearish trade on Yum! Brands (YUM). Industrial profit numbers in China were particularly bad this week, which probably contributed to the selloff in oil. We want to take advantage of economic issues in China and a shift towards a more standard IPO process in the Chinese stock markets, which is likely to have a negative effect on equities.

More importantly, these trends and changes should have a large impact on Western firms with exposure to China in the near term.

We picked YUM because the firm still has risk-overhang from food safety issues that will be in and out of the news this coming month. Although the stock has recovered somewhat since the October earnings crash, the price is barely back to resistance, which looks like a great place for a new bearish entry. Soft consumer sentiment in the U.S. and Western Europe should add “support” to our outlook as investors trade very cautiously into the new year.

‘Buy to open’ the YUM February 72.50 Puts (YUM160219P00072500) for a maximum price of $3.35.

We do not have a target or stop loss in place for this YUM trade, as we will be watching the stock’s chart to tell us when to exit.

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InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of SlingShot Trader, a trading service designed to help you make options profits by trading the news.