Options Action
Friday 5:30 PM ET, Saturday & Sunday 6:00 AM ET
Options Action

The million-dollar bet on an energy rebound

Options Action: Huge bet on XOP
Options Action: Huge bet on XOP

Crude oil is hitting new lows, with WTI falling as low as $58.80 per barrel in early Friday trading. This, in turn, has crushed energy stocks. But one big trader seems to believe that the selling has produced a fat opportunity, and is now betting millions on an energy turnaround.

In a large trade Thursday on the SPDR S&P Oil & Gas ETF (XOP), one trader bought 14,500 March 53/62 call spreads for $1.50 each. This trade, which cost $2.2 million in options premium, only makes money if XOP rises above $54.50 by March expiration, which is 23 percent above Thursday's close. Maximum profits come with the ETF at $62.

While that may be far from current levels, it wouldn't bring the ETF back to even on the year. XOP is down 40 percent in three months on the back of the crude oil crush.

Read More Oil has become the new housing bubble: Trader Rob Raymond

For that reason, despite how far it looks from current levels, "a retracement back to $62 would not be a far cry," Dan Nathan of RiskReversal.com commented Thursday on CNBC's "Fast Money."

So how much does this trader stand to make if such a move plays out? Given that this trade produces profits between $54.50 and $62, that 14,500 contracts were bought, and that each contract controls 100 shares, the maximum profits on this trade are $10.9 million.

Black gold, indeed. Maybe.

Follow the show on Twitter: @OptionsAction.