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Trader doubles down on bearish oil bet

Options Action: Bear's bet on OIH

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.)

Read More Traders still betting on much lower oil

But at the same time that the puts were sold for a profit, the trader simultaneously bought 30,000 April 30-strike puts for $1.25, for a fresh outlay of $3.75 million. Notably, since 10,000 more contracts are being bought at the same price, this is a 50 percent larger bet than the original trade.

And given that the (OIH) opened on Thursday at $34.20, this leg of the trade will only make money if the ETF falls another 16 percent in the next 3 1/2 months.

Based on the size of the trade and the percentage drop required, then, this trader certainly appears to feel a strong conviction that the slide in oil service stocks isn't even close to over.

Read MoreJim O'Neill: Oil prices to end 2015 higher