Crude oil settled down almost 2 percent Tuesday, hitting a two-month low around $43 a barrel. However, one trader says the options market indicates that a large move higher may be ahead.
Stacey Gilbert, head of derivative strategy at Susquehanna, said oil trading continues to be a high-volatility environment. And while crude could see more losses, she said, any big move is more likely to come to the upside.
"Although oil can clearly go lower, the one thing the options are saying is that the larger moves, we're talking moves of 15 to 20 percent, they are slightly favored to be more to the upside than to the downside," Gilbert said Tuesday on CNBC's "Power Lunch."
Indeed, many market professionals see a sharp spike in crude oil as more likely than a continued decline. They reason that the drop in crude comes from heavy supply and somewhat weak demand, and that those dynamics are unlikely to get even more bearish from here.