One trader who has already made big money on the decline in oil services stocks is doubling down and betting big on further downside for the sector.
On an active day for options on the Market Vectors Oil Services ETF (OIH), the biggest trade was the "rolling" of a position in the February 34-puts down to a position in the April 30-puts. This maneuver allows the trader to profit on a successful bearish bet on oil stocks, and to effectively double down, in an expectation that the trend will continue.
This trade, which Mike Khouw chronicled in a Wednesday "Fast Money" segment, began in December. That's when the trader, over a couple weeks, bought bearish put options on the oil ETF. Specifically, 20,000 February 34-strike puts on the (OIH) were purchased for an average price of $1.25 per share.
On Wednesday, the trader exited that position by selling the contracts for $1.82 per share, enjoying a profit of just over a million dollars. (If you're following along with the math here, recall that each standard options contract controls 100 shares of the underlying stock or ETF.)