The trader purchased 20,000 May 20 strike puts for 23 cents each. Since each put option accounts for 100 shares, this is a half-million dollar bet that gold miners will fall below $19.77 by May expiration.
The gold miners ETF, the GDX, has been on tear as investors flock to the safe-haven assets due to a number of factors like global uncertainty, the Fed and oil looming over the markets. But as the S&P 500 inches closer to its all-time high, and earnings for many of the ETFs components begin to roll out, CNBC contributor Mike Khouw said the group could see a volatile couple of weeks.
"We've got two of those miners actually reporting earnings very soon," the Optimize Advisors co-founder said Tuesday on CNBC's "Fast Money." Newmont Mining reports after Wednesday's closing bell and Barrick Gold reports Tuesday morning.
For Newmont Mining, analysts are calling for an earnings estimate of 18 cents per share, down from 46 cents per share a year ago, according to FactSet.
Shares of the GDX were up 1.75 percent Wednesday afternoon.