Shares of Twenty-First Century Fox have been struggling this year, but some are betting it will see a huge rally in the coming months.
The studio's Class A shares are down 11 percent in 2015. However, on Tuesday, when options volume on the stock was eight times its average, one trader placed a sizable position that Fox shares will turn itself around.
Specifically, a trader bought 20,000 contracts of the January 42-strike calls, paying 50 cents each. As each contract controls 100 shares, the trader is wagering $1 million that 21st Century Fox Class A shares will be at least 25 percent above Friday's close by January of next year. Calls are bullish bets that give its purchasers the right to buy a stock at a set price by a given date.
Yet the trader may not need such a large move over a long period of time to see huge gains from these long-dated, out-of-the-money calls. According to options expert and CNBC contributor Mike Khouw, the trader has gained leverage ahead of Fox's earnings release, scheduled three weeks from now.