Semiconductor stocks took a tumble Tuesday, and one trader is betting big on even more losses ahead for the space.
The semiconductor ETF, SMH, fell almost 2 percent Tuesday, leading the fund into negative territory for the year. On Monday, one trader bought 10,000 of the December 54/50 put spreads for $1 each. This is a $1 million bet that SMH falls as low as $50 by December expiration.
A move to $50 would be another 7 percent drop from where SMH traded Tuesday morning.
Among the biggest losers in the S&P 500 on Tuesday were SMH holdings Skyworks Solutions and Avago Technologies, down 5 and 4 percent, respectively. Both are suppliers for Apple, which also dropped on a Credit Suisse report that the tech giant is cutting iPhone production.