Traders see more pain for stocks

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Big bearish bet on stocks

Despite the fact that the S&P 500 is less than 3 percent from its all-time closing high, the recent tumble in media and biotech stocks has sent a chill through the options market. And now, some traders are betting on more pain to come in the broad market.

On Thursday, when bearish bets doubled those of bullish ones, one trader bet $9.5 million that the S&P 500 ETF, the SPY, would continue its decline over the next two weeks. Specifically, that trader, or institution, purchased 45,000 of the August 207.50-strike puts for $2.10 each. Since buying a put is a bearish bet that allows a trader to sell a stock, or in this case an ETF, at a given price for a set time, this trader makes money if the SPY falls below $205.40 by Aug. 21.

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