Carter Worth And Mike Khouw's Market Vectors Gold Miners ETF Trade

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On CNBC's Options Action
, Carter Worth analyzed
Market Vectors Gold Miners ETFGDX
from a technical standpoint. He compared its performance with
SPDR Gold Trust (ETF)GLD
and he showed that
Market Vectors Gold Miners ETF
jumped 105.8 percent from its December lows, while
SPDR Gold Trust (ETF)
gained 23.7 percent. Worth believes that the move in
Market Vectors Gold Miners ETF
is overdone and he expects to see a pull back. He would take a short position in the ETF. Mike Khouw suggested an options strategy to make a trade based on Worth's idea. He explained that options in
Market Vectors Gold Miners ETF
are pretty expensive at the moment and he wants to buy a calendar put spread to reduce the cost. Khouw wants to sell the May 25 put for 1$ and buy the July 25 for $2. The trade would cost him $1 and it breaks even at $24. If
Market Vectors Gold Miners ETF
stays above $25 at the May expiration, the May 25 put is going to expire worthless and he is going to have the July 25 for a half of its price.
Posted In: CNBCMediaCarter WorthMike KhouwOptions Action
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