Traders betting big on Applied Materials
The big bets on Applied Materials continue.

On Tuesday, shares of the chipmaker were down just 0.3 percent. But options in Applied Materials saw enormous activity. By the early afternoon, some 170,000 calls traded—five times its average daily volume. In fact, the stock's options trailed only Apple and Facebook in volume for the day.

In one transaction that caught the eye of many traders, an investor bet over $1 million that Applied Materials would rally 25 percent in the next three months. Specifically, the buyer purchased a call spread, buying 25,000 June 27-strike calls and selling an equal amount of the June 30-strike calls at a price of 46 cents each. Since each contract controls 100 shares, the total notional value of the transaction was around $1.15 million.

"That's a trade that could potentially be worth more than $6 million if Applied Materials got to that $30 upper strike price by June expiration," said CNBC contributor Mike Khouw.

A call is a bullish wager giving its purchaser the right to buy a stock at a specific price on a given date.