Carter Worth And Mike Khouw's GDX Trade

Carter Worth of Cornerstone Macro spoke on CNBC's "Options Action" about gold. He said the precious metal bounced off three times from its support at $1,677, forming a triple bottom pattern. Worth has also noticed gold's relative performance to copper has started to improve, making new relative highs.

He also expects the U.S. dollar to pull back, which should help gold advance higher, to $1,850.

Mike Khouw wants to use options to make a bullish trade in VanEck Vectors Gold Miners Etf GDX. He wants to buy the October $31 call for $1.39 and sell the September $33 call for 30 cents. The total cost of the trade would be $1.09, which sets the breakeven for the trade at $32.09 or 0.78% above the closing price on Friday.

If the September $33 call expires out of the money, Khouw can sell another call and lower his cost basis for the October $31 call.