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A trade made on the options in Diamond Foods

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[DMND  Loading...      ()   ] around 10 am Wednesday potentially netted that investor $1.7 million or more after shares of the snack maker plunged on an accounting restatement revealed later that day.

Diamond, which makes Emerald nuts and Pop Secret popcorn, was down 41 percent at its low of $21.44 after saying yesterday evening that it would need to restate its results for the last two years due to mistakes made in the accounting of payments to walnut growers.

The move, a drop from its $36.66 closing price yesterday, could cause the company to lose out on its proposed purchase of Pringles potato chips from Procter & Gamble

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Wednesday morning a trader purchased 1,500 deep out of the money puts expiring in March with a strike price of $30 for $2.65 per contract and at the same time, sold deep out of the money calls expiring in March with a strike price of $50 for $1.45 a piece, according to data snagged by TradeMonster co-founder Jon Najarian.

The rather astute (or tipped-off) trader paid a net $1.20 for the options spread or $180,000 total. At $21, that trade is worth $1.9 million, or a profit of more than tenfold.

“I suspect the SEC will be looking into who did this trade as the size indicates a possible informed buyer,” said Najarian, whose web site uses algorithms to sniff out unusual trades like these.

A put option is a contract to sell a stock at a set price and time in the future. A call option is a contract to buy a stock at a set price and time in the future. The trade described above is a combination of the two – a so-called spread – used to maximize profit in the event of a plunge in the stock.

The SEC declined to comment.

—With reporting by Eamon Javers.

For the best market insight, catch 'Fast Money' each night at 5pm ET, and the ‘Halftime Report’ each afternoon at 12:00 ET on CNBC. Follow @CNBCMelloy on Twitter.

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John Melloy is the Executive Producer of Fast Money. Before joining CNBC, he was an editor for Bloomberg News, overseeing the U.S. Stock Market coverage team. Click here to see his full bio.

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