On Tuesday, during CNBC's Fast Money, Melissa Lee relayed an unusual options trade: a trader had purchased 50,000 out-of-the-money Gold call options between $1600 and $1800 and set to expire in August and September.

Such a move could have only been undertaken with the backing of substantial capital.

Brian Kelly speculated that the purchaser was a sovereign wealth fund--China in particular.

Arguing that if China revalued their yuan against the dollar, the price of gold in U.S. dollars would instantly rise. Then, those 50,000 options contracts would be in-the-money, and China would accept delivery.

While its true that China wants gold to diversify its mammoth holdings of foreign reserves, does China want to revalue the yuan?

China has been struggling with high inflation for months, and a revaluation of the yuan may help to contain inflationary forces. Yet, a revalued yuan may make Chinese exports less attractive to foreign consumers.

Traders who believe Brian Kelly's theory have many options to consider.

They might consider a play on the Chinese yuan such as WisdomTree Dreyfus Chinese Yuan Fund /quotes/comstock/13*!cyb/quotes/nls/cyb CYB -.00% . CYB attempts to return a value corresponding to the strength of the yuan and may do well if the Chinese revalue their currency.

Traders may also consider a play on Japan. If the yuan is revalued, Chinese consumers may have more purchasing power to use on foreign goods. China currently imports more goods from Japan than from any other nation. In that scenario, traders might look at iShares MSCI Japanese Index /quotes/comstock/13*!ewj/quotes/nls/ewj EWJ -0.40% .

Even if China is not the purchaser, the existence of the trade may be an extremely bullish sign for gold. Traders may wish to play it simply with SPDR Gold Trust /quotes/comstock/13*!gld/quotes/nls/gld GLD +0.18% . GLD tries to return a value corresponding to the price of gold.

(c) 2011 Benzinga.com. All rights reserved. This material may not be published in its entirety or redistributed without the approval of Benzinga.

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