Trader bets nearly $1.5 million on major gold rally in the second half

Gold has rallied 6 percent this year, and as investors weigh mounting geopolitical tensions, one trader is betting nearly $1.5 million on an even bigger rise for the precious metal in the second half.

The yellow metal climbed this week as the dollar and stocks slumped as slowing economic data and jitters over North Korea have Wall Street hitting the panic button.

On Wednesday, options traders started piling into the GLD, the exchange-traded fund tracking gold. There was about "two times the average daily call volume in GLD," Mike Khouw of Optimize Advisors said Wednesday on CNBC's "Fast Money."

In one eyebrow-raising trade, someone bought 35,000 contracts of the December 135/160 call spread paying 42 cents each. Since each options contract accounts for 100 shares, this is about a $1.5 million bet that the GLD will close above $135.42 by December expiration — which is more than 16 percent above where it was trading Thursday.

"There has been a lot of institutional interest in both of these strikes since the beginning of the year. It could be some follow-on activity from that earlier activity we saw in January and mid-March," Khouw said.

The GLD was in the $116.40 range midafternoon Thursday.

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