Options trader calls the bottom for stocks

Stocks are suffering another rough day on Thursday, as the S&P 500 looks to log losses for the fourth-straight session for the first time this year. And that's unwelcome news for one big options trader, who has staked $100 million on a bet that the market doesn't have much further to fall.

On a punishing Wednesday for stocks, one firm appeared to spot sunshine peaking through the clouds. And in one of the biggest options trades of the day, one party sold a great deal of "put" options on the Nasdaq 100, a bullish trade that shows a great deal of confidence that the recent losses won't greatly accelerate.

Read MoreHow stocks can recover from dismal October start

Specifically, this firm sold 41,500 October 3625/3600 put spreads for 60 cents each. This trade provides a high-probability chance of allowing the trader to keep the $2.5 million collected on the trade, as the market merely needs to avoid falling 9 percent from current levels. However, if the Nasdaq 100 drops 9.7 percent, this trader will see a loss on this trade of $101.30 million.

As that incredibly lopsided risk-reward relationship attests, "this is obviously the kind of trade that one places if you're not really concerned," said Mike Khouw of Dash Financial.

Indeed, it is telling that the trade was placed on the Nasdaq 100. On Wednesday, the 1.6 percent slide in that index outpaced the declines in the S&P 500 and the Russell 2000. So if it's time to call a bottom after the recent slide in stocks, the Nasdaq 100 might be the place to start.

Read MoreThe hidden truth about the Nasdaq rally

"There might be a little more downside to the market," Khouw said. "But this trader thinks, maybe the worst is behind us."

And with $100 million on the line, this trader must have a great deal of confidence in that thought.


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