Stocks extended losses on Wednesday after the People's Bank of China moved to devalue its currency for a second-straight day.
The sharp selling has sent a chill throughout the markets this week, as the VIX spiked to a one-month high and the S&P 500 turned negative on the year. And according to some traders, there could be even more volatility for stocks in the coming days.
"The VIX has been a hot topic on the floor [this week]," CNBC Contributor Brian Stutland said Tuesday on CNBC's "Fast Money." The VIX, a measure of volatility in the market, has remained at historical lows for much of 2015, as stocks have traded within a tight trading range.
But in one eyebrow-raising trade made Tuesday, someone bet the VIX could spike as high as 20 in the next week. Specifically, that trader purchased 20,000 of the August 18/20 call spreads for 8 cents each and then purchased another 9,000 of those call spreads for 10 cents each an hour later. In this trade, that person is betting a quarter of a million dollars that the VIX will move as high as 20 by next week. "That's a huge bet that the VIX trades to the upside," said Stutland. The VIX was trading at 15 mid-day Wednesday.