Mike Khouw Sees Unusual Options Activity In SPDR Gold Trust ETF

Mike Khouw spoke on CNBC's Options Action about a bullish options bet in SPDR Gold Trust (ETF) GLD. He said that although its chart looks like it is going to 2016 lows, there are some traders who are willing to buy calls in the name.

He noticed that there was a purchase of 13,000 contracts of the February 115 calls for $0.80 in SPDR Gold Trust (ETF) on Thursday. Khouw thinks that this might be a good way to make a bullish bet on gold. The trade breaks even at $115.80 or 7.88 percent above the current market price. Khouw added that it is possible for gold to increase in price in rising interest rates environment and he gave an example of the price movement in the 70s, when gold traded higher because of higher inflation.