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Traders see Valeant shares plunging another 50%

Shares of Valeant continued a four-day plummet on Thursday, falling 11 percent after opening bell. And some traders appear to be betting on an even steeper fall in store for the pharmaceutical giant.

The stock closed down 19 percent in a wild session after Citron Research released a report accusing the company of inflating sales numbers through dubious business practices.

Read More Bill Ackman: I bought 2M shares of Valeant today; I believe in the company

With the stock trading at 10 times average daily volume on Wednesday, traders put on some very bearish bets that Valeant shares could lose another half of their value in the next few months.

Specifically, traders bought more than 5,000 of the Valeant January 60-strike puts for an average price of more than $8. This is a $4 million bet that shares will fall below $52 by January expiration.

In Citron's report, the short-seller also lowered its price target for Valeant to $50.

CNBC contributor Mike Khouw said even though there was a lot of panic in the market, Valeant options also saw some bullish activity, notably trades on the November 190-strike calls.

"One way or another, the options markets, which are betting to the downside, think it's going to be a pretty wild ride over the course of the next several months," Khouw said Wednesday on CNBC's "Fast Money."

Valeant issued a press release on Wednesday refuting Citron's claims. The stock is down more than 40 percent this week.

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