While Carl Icahn admits 'modest' defeat on the Dell deal, he remains neck deep in Herbalife, and as we illustrated back in February [6], and warned earlier in January [7], it seems someone is betting right alongside him on a massive short-squeeze - a la Volkswagen. It would appear, someone decided that today was the day to buy 1000 lots (100,000 shares) of Jan 2014 $105 calls (implying an expectation of a 65% surge in price from here) and funded that by selling 1000 lots of the Jan 2014 $95 calls. Whether this is a hedge for Ackman (fearing the worst) or someone betting on an 'event' across the one-year anniversary of Ackman's big bet is unclear. One thing is for sure, if this pays off, we will see more tweets from the man himself...
1000x1000 in the 95/105 Jan 2014 Calls??!!

and judging by the post-trade moves in implied vol, we suspect it was a more aggressive long than a hedged short...
So it appears that this is a leveraged bet that HLF's stock price will reach above $105 by the end of Jan 2014...
Charts: Bloomberg

