The million-dollar bet on emerging markets

One trader appears to be betting big that the real bounce in emerging markets is just emerging.

On Thursday, when the popular iShares MSCI Emerging Markets ETF (EEM) was trading at $30.50, a trader bought 215,000 March 33-strike calls for 16 cents per share. This is a long-shot bet that the EEM rises 9 percent in just a month.

"The options market is only saying there's a 15 percent chance that that trade is going to be in the money on March expiration — so this is not a high-probability bet if you're looking for a bounce," Dan Nathan of RiskReversal.com said Thursday on CNBC's "Fast Money."

This is no small-potatoes wager, either. Since each options contract controls 100 shares, some $3.4 million was laid out in options premium. If the EEM fails to move above $33 in a month's time, that money is lost.

The ETF is up 5 percent in the past week, but is still off more than 6 percent on the year, in line with the S&P 500.

Nathan, meanwhile, is no bull on the ETF.

"When it broke $35 earlier, that was a big support level after a long consolidation," he said. "It's still in a big downtrend here."

"I wouldn't be buying 10 percent out-of-the-money calls in EEM," Nathan said.

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