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Trader bets on another major plunge for Deutsche Bank

Options Action: Bearish bet on Euro banks

Shares of the embattled Deutsche Bank are already down more than 50 percent in the last 12 months, but as fear continues to swirl around the health of Europe's economy, one trader is betting that Germany's biggest bank is due for another major dive in the coming month.

In an eyebrow-raising wager on Wednesday, someone purchased 9,000 of the August 12-strike puts for $1 each. Since each put option accounts for 100 shares of stock, this is a nearly $1 million bet that Deutsche Bank could fall below $11, or 14 percent, by August expiration.

"How low can it go is the really the question," Mike Khouw told CNBC's "Fast Money" on Wednesday. "Options [prices] are about three times as expensive as they were a year ago."

The trade factors in Deutsche Bank's earnings announcement on July 27 — where investors are expecting weak data.

"[This trade] would take the market capitalization of Deutsche Bank down to about $15 billion, which is right around the 2008-2009 credit crisis lows," warned the co-founder of Optimize Advisors. "People are paying up. They obviously are thinking there's some bad news still in store for Deutsche Bank, even after the big decline we've already seen."

In the past month, Deutsche bank stock is down nearly 25 percent and, year to date, has lost nearly half its equity value.