The fluctuation of the open-interest ratio has arguably been a compelling indicator for the price of the underlying ETF this year. Traders started buying up puts in late May and early June as SMH momentum slowed and the ratio reached a one-year bearish high on June 24, just two days before the fund peaked and entered a 25% draw-down.

"Bank exposure to leveraged ETF and Situational Awareness this summer got to the point they felt very exposed to jump risk in semiconductor names and that caused hedging and volatility to go way up," said Zed Francis, CIO of Chicago-based Convexitas, which runs a semiconductor options trading strategy for clients. "Now they don't need those hedges, and I believe unwinding of those hedges has made volatility in the sector inexpensive."

Queue the big-money contrarian.

Whether it's the dropoff in the cost of trading semiconductor options – SMH implied volatility collapsed from 65% last month to 40% Monday, the lowest since February – or just the trader urge to fade the crowd, someone put on a massive bet against the group on Monday.

Just before 11 a.m. ET, a trader on the Nasdaq PHLX exchange bought 20,100 630-strike SMH puts expiring Nov. 20 for $129 million, according to data from SpotGamma and ThinkOrSwim.

Open interest in that contract was less than 50 at Friday's close, meaning the trade was almost certainly a new position. Without any other trades of that magnitude at that time Monday, and with the fund trading at $594, the deep in-the-money put position is likely being used as a synthetic short bet against the group.

It was the single biggest options trade on the tape Monday and 3.5 times bigger than the second-biggest transaction, a $37 million leg of a multi-part trade in Sandisk, according to SpotGamma data.