Dan Nathan Sees Unusual Options Activity In SPDR Gold Trust (ETF)

Dan Nathan spoke on

about unusually high bullish options activity in

. The options volume was 3.5 times higher than the average daily volume and calls had a big impact on it. When SPDR Gold Trust (ETF) was trading at $114, a trader sold to close 100,000 contracts of the June 120 calls for $0.13 and then bought 100,000 contracts of the June 117.5 calls for $0.38. Nathan explained that the trader had to pay $0.25 or $2.5 million for that position. Nathan thinks that it is not a good idea to buy out of the money call options that breakeven 3.5 percent higher from the current price to make a bullish bet on gold. He added that the reason why this trader decided to do so might be in a low implied volatility.