The SPDR Gold Trust (NYSEARCA:GLD - 168.06) is sitting near a multi-month high, prompting some covered call traders to rethink their strategy. Call volume on the ETF is running at almost double the average pace, and two strikes seeing some attention are the October 164 strike and the November 177 strike.

It looks as though 5,000 of the in-the-money October calls were bought to close for $6.45 each, while the same number of out-of-the-money November calls was sold to open for a credit of $2.43 per contract.

Assuming the trader also owns shares of GLD, the best-case scenario is for the ETF to rally just up to the $177 strike at expiration, allowing the trader to keep the credit collected (as the short call expires worthless) and hold onto any gains realized in the ETF shares.

Above this strike price, the trader will likely be called away and forced to hand over his GLD shares at a price of $177 apiece, relinquishing any upside north of this strike price. Of course, the trader can always opt to roll positions to a later month and a different strike, as appears to have happened today.

On the flip side, if the security declines, losses in the underlying holding will be offset by the credit collected from selling these calls.