The investor is looking for much more upside within the next two months, using February options to put on on a butterfly or wingspread. The maximum gain is the difference between the wing and body, or $10, less what they paid, $1.50 - potential net of $8.50 per spread. The maximum gain is realized if the stock price closes at $105 by expiration. The max loss is what was paid for the spread, $1.50. As one can see, the spread offers a nice risk/reward ratio.
The chart is bullish, with shares consolidating for two weeks for the next leg higher. Through resistance at $91, the next resistance lies at $95.80 and then $105, the intended target. The chart is bullish and options activity such as this spread indicates the big boys agree!
The company reports on 2/2 before the bell and there recently has been renewed takeover chatter.