Carter Worth And Mike Khouw's Silver Trade

On CNBC's "Options Action," Carter Worth spoke about iShares Silver Trust SLV. He likes the ETF a lot and he sees a lot of upside potential ahead. SLV is trading close to its resistance and Worth expects it to break out to the upside.

Mike Khouw suggested a bullish options strategy in SLV. He wants to sell the August $23.50 put for 52 cents, buy the August $26 call for $1.46 and sell the August $28 call for 91 cents. The total cost of the trade would be 3 cents, which sets the breakeven for the trade at $26.03 or around 1% above the closing price on Friday.

If the stock trades to $28 or higher, the trade would reach its maximal profit of $1.97. In case it closes below $23.50 at the August expiration, Khouw would have to buy it at $23.50.