An investor shelled out $50 million on a bet the S&P 500 will extend its bull run this year

• Someone spent $50 million buying options on the S&P 500, in a bet the benchmark will rally through 2021.
• Susquehanna's co-head of derivatives strategy said the maximum value of the contracts could be worth $136 million.
• The trades occurred before the Fed announced its policy decision Wednesday.

There appears to be an investor so confident in the S&P 500's ability to rally through year's end that they spent $50 million in options to bet on it.

That's the determination of Chris Murphy, co-head of derivatives strategy at Susquehanna, in a note Wednesday looking at a spate of trades with the SPDR S&P 500 ETF Trust related to call spreads maturing between October, November, and December. The big bet was first reported by Bloomberg.

The transactions occurred before the Federal Reserve on Wednesday afternoon announced its latest monetary policy decision and said it will "soon" begin tapering asset purchases, currently running at $120 billion a month.

"These all came with a healthy premium and if we assume it was all the same client it would be ~$50m in premium," wrote Murphy, adding that the maximum value of the contracts would be $136 million.

SPY tracks the S&P 500 and is the largest ETF as it carries more than $391 billion in assets under management, according to ETF Database.

The investor may have been underweight equities and aimed to "catch up" if the S&P 500 rallied throughout the fourth quarter and into the end of 2021, or it could be an investor who was already bullish "getting longer," said Murphy.

Stocks jumped on Wednesday following the Fed's announcement. Analysts said Fed Chair Jerome Powell gave the central bank time to continue with stimulus if warranted. The S&P 500 has climbed about 18% so far this year.

SPY closed at $437.86 on Wednesday. Murphy listed the trades as:

1) 25k Dec 448/470 call spreads $7.91

2) 32k Nov 448/460 call spreads $4.35

3) 43k Oct 442/452 call spreads $3.89