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The $6 million bet that gold's run is just getting started

If you missed out on gold's recent rally, fear not, because one savvy trader is betting more than $6 million that the bullion breakout is far from over.

In an eyebrow-raising trade on Tuesday, one trader bet that the gold ETF, ticker symbol GLD, could keep soaring through the summer. Specifically, that trader purchased 66,000 of the September 135/140 call spreads for 96 cents each. Since each options contract accounts for 100 shares of stock, this is a $6.3 million bet that the ETF could rise as high as $140 — or another 7 percent from the current price of around $130.

"If you take a look at how gold has performed since the beginning of June, you can see that it's not a bad call to make," Mike Khouw said of the sizable trade on CNBC's "Fast Money" on Tuesday. "The GLD was trading around $115 only a month ago, so these types of moves are very possible."

Khouw noted that much of the movement has come in the last two weeks, after a surprise vote from the United Kingdom to leave the European Union on June 24 had initially sent markets into disarray.

"With rates falling to all-time lows, one of the places that people seem to be reaching is for gold," said the co-founder of Optimize Advisors and CNBC contributor. The precious metal has rallied 9 percent since the vote on June 24 while the U.S. 10-year yield tumbled to historic lows.

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  • Melissa Lee

    Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

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