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Mike Khouw Lays Out Gold Play Through GDX Trade

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Mike Khouw suggested on CNBC's "Options Action" a bullish options trade in VanEck Vectors Gold Miners ETF (NYSE: GDX). Gold is one of the few risk assets that hasn't come along for the high-flying ride with everything else, said Khouw. While the market and risk assets are at all-time highs overall, gold certainly isn't, he said.

Khouw sees opportunity in the underperforming gold as net-longs in the commodity have been increasing lately. Also, on a valuation basis, the gold miners are trading at lows they haven't seen since 2013, he said.

To make a bullish bet, Khouw wants to buy the June $34/$39 call spread for $1.70. The trade breaks even at $35.70, or 2.79% above the closing price on Friday. If the stock jumps to $39 or higher, the trade is going to reach its maximal profit of $3.30.

 

 

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Posted-In: CNBC Mike Khouw Options ActionOptions Markets Media Trading Ideas

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