According to Financial News, an anonymous investor has placed a bet on an index of Europe's top 50 stocks falling by a third by the end of September.

The mystery investor has bought put option contracts on the DJ Erostoxx index that will result in a profit if it plunges to 2,800 or below by the end of September. Based on the 2,800 strike price, the position covers a notional €6.9bn, and potentially even more using a market price of about 4,100 when the trades were done on Tuesday and Wednesday.

According to Bloomberg, the September put option with a 2,800 strike was the most popular DJ Eurostoxx 50 contract that day.

In U.S. an anonymous trader sold 10K contracts on EVERY S&P/Y "strike" shorts stocks "in the money" effectively selling all his SPY holdings for cash up front without pressuring the market downward. This is an enormous and dangerous stock option activity. If it goes right, the guy makes about $2 Billion. If he's wrong, his out of pocket costs for buying these options will exceed $700 Million! The entity who sold these contracts can only make money if the stock market totally crashes by the third week in September.

Allthough these trades are not naked, but a part of poppably some hedge funds' complex contract structure in oder to cut losses or hegde gains, the market seems to prepare itself to a decline.