Options in the SPDR Select Technology Sector Fund (XLK) experienced an unusually high amount of trading activity yesterday afternoon.

While XLK option volume was unusually high, its not unusual for professional traders to place bets before a big event.  And thats exactly whats on tap for tomorrow with Fed Chairman Ben Bernanke scheduled to speak at the Jackson Hole conference.

Now, XLK closed even yesterday at $30.57, but some gigantic options trades were placed on the bearish side.

One such trade was made just after mid-day.

In fact, a single option trader came in and made one of the largest option trades seen on XLK in months.  The purchase he made was a put spread .  Its a bearish position made by buying one put option and then selling another put option at a lower strike.

In this slightly aggressive trade, the trader bought 4,500 contracts of the XLK October $31 strike put options for an average price of $1.25.  At the same time, he sold 4,500 contracts of the XLK October $29 strike put options for $0.46.  So, this trade was done for a total cost of $355,500.

I know that sounds like a lot of money but for the average professional option trader, its really not.

However, what would be a large amount of money is the $544,500 profit this trader will make if XLK drops a mere 8.4% to $29 a share by October expiration.  Thats the maximum potential gain for this trade.

So, what are the traders chances of success?

According to our tracking system, theres a greater than 67% probability he will earn at least some profit.

As a professional option trader myself, I wouldnt hesitate at all to make this same trade .

For those of you who dont know, XLK is an exchange traded fund or ETF for short.  Its largest holdings include stocks like Apple (AAPL), Microsoft (MSFT). IBM (IBM), and Oracle (ORCL).

It seems clear that yesterday’s huge trade on XLK comes on the heels of the major Jackson Hole announcement concerning more monetary easing.  Also, I think that traders are starting to feel a little uncertain with the fact that over the last few months this ETF has been in a major uptrend.

In addition, with the technology sector at akey technical resistance point, option traders think its the perfect time to exercise a little caution.

Itll be interesting to see if theyre right!

For more detailed information on unusual options activity and how you can profit from it, be sure to sign-up for our daily newsletter, Options Trading Research.   Its always 100% free and packed full of option trading ideas you can use immediately in your own portfolio.  Click here to subscribe for free.