In a move that drew mixed responses from money managers on Thursday, one investor bought an estimated $4.8 million worth of put options on shares of the SPDR Trust (NYSE: SPY).

Options houses reported that a single unknown buyer transacted 34,000 April puts on the exchange-traded fund at a strike price of $70, according to Reuters.

Traders say it's likely a hedge fund manager or other type of institutional portfolio manager with enough assets to try to game the market took advantage of an otherwise slow day for such transactions. 

"This seems like a very aggressive move. The options they went long on expire in April. So it looks like they're protecting themselves against the S&P 500 falling as much as 17% between now and then," said Paul Baiocchi, a senior market strategist at Delta Global Advisors.

The unnamed investor—or investment group—bought put options at $1.79 each on SPY. Each contract represents 100 shares. Based on the reported number of contracts purchased, Baiocchi says the deal translates into slightly less than $4.8 million in options taken on SPY.

But unlike some options traders are warning, he says the move doesn't necessarily mean the manager is making a bearish call on the broad stock market.

"It might be an outright speculator. But it seems more likely that it's a manager who's trying to protect the overall volatility of his portfolio," said Baiocchi. "He might just feel extended with his other stock picks and feel like it's time to gain some insurance, regardless of short-term conditions."

Red Flag 

A red flag, however, was trading volume on SPY on Thursday. "The volume of SPY options, especially for ones expiring by April, was very small relative to the size of this one trade," said Baiocchi.

In fact, on the day, a total of about 36,847 contracts traded hands involving April $70 SPY puts, according to Main Management in San Francisco.

"Almost 95% of the day's volume was a single print," said Kim Arthur, chief investment officer at the institutional and high net worth advisory firm.

The total outstanding contracts in SPY, or open interest, were only 4,542 before Thursday, he added. "So that boosted the SPY options contracts more than eightfold," said Arthur.

"Regardless of the strategy they're trying to employ, what this boils down to is that somebody's making a big bet that the S&P 500 will fall to the 700 range," he added, noting that the index closed on Thursday at 845.

Since the investor paid $1.79 per options contract, that means he or she won't start making money until the S&P 500 tumbles below 680.

"This isn't an extraordinarily huge bet. It just looks that way relative to the existing cumulative volume on SPY options, which has been fairly weak up to this point," said Arthur. "Basically, these contracts have only been available for eight trading days and not much has happened. So somebody's rolling out the dice and taking a shot."

Whether it was intended to be a bearish speculative move or not, Baiocchi warns that in such uncertain times, speculators could start circling the ETF even more.

"If you know there's a big buyer who wants to buy a ton of options on SPY, and there's not much other activity otherwise, you're going to start trying to write options to make money off this type of a move," he said. "The natural question for any trader is: What does this guy know? It could put pressure on SPY in the short term."

-- This report was submitted by IndexUniverse.com's Murray Coleman.