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Why one trader is betting over $1 million against Europe

Equities around the world have been surging this year, but the run for one country's stock market could soon wane as political unrest comes to a head.

The ETF tracking the European stocks, FEZ, has rallied more than 4 percent in 2017. However, uncertainty surrounding the French presidential election in April is causing at least one trader to question whether or not the run can continue.

In a large bearish bet on Monday, there was a buyer of 13,000 May 33-strike puts for 90 cents each. Since each contract accounts for 100 shares, this trader is betting over $1 million that the FEZ will close below $32.10 by May expiration, about 8 percent lower than Tuesday's opening price.

According to Dan Nathan of RiskReversal.com, a large purchase of puts like this could indicate a hedge for a big upcoming event.

"There was buying of puts looking out to May. That's clearly targeting, what I suspect is, the French election," Nathan said Monday on CNBC's "Fast Money." "This could be protection, you never really know when you're looking at unusual activity, but it got me looking at it, and April 23 is going to be on a lot of trader's calendars."

The FEZ was trading at the $34.84 level during midafternoon trading on Tuesday.

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