Mike Khouw Weighs In On SLV

On Friday's edition of CNBC's "Options Action," Mike Khouw answered a viewer's question about iShares Silver Trust SLV. The viewer wanted to know if now is the right time to buy some call options in SLV and can it reach $30 by the end of the year.

Khouw likes silver fundamentally, but he finds $30 as a long way up for SLV. If we do get a rally in the ETF it will run into trouble at $26, he said. To make a bullish bet, he would use a zero-cost call spread risk reversal. He would sell a 10% out of the money put to finance the purchase of the $23/$26 call spread.