YRC Worldwide Inc (YRCW)

[GuyBig]

Options Activity is Positive

I checked the YRCW option chain today. For January, 2016, 2500 25 calls traded and 2500 17.50 puts traded. If it was one person going long, selling covered calls and buying puts for protection, what's called a hedge wrapper, the internal return if the stock is called away at 25 and the puts expire worthless is about 9% per year.

If it was one person shorting the stock, shorting the puts, and buying the calls for protection on the upside, the internal return if the stock is covered at 17.50 with both the puts and calls expiring worthless is about 15% per year.
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There's at least $5 million at the hedge fund broker for this to have taken place. The potential returns are good, but not outrageously good. Someone's putting up millions to make between 9 and 15% per year over the next 19 months. Putting up that much money to make a good, but not outrageously good return, indicates that the person who did the transaction does not think YRCW is enormously speculative. The potential returns, long or short, indicate that YRCW is not going to go bankrupt on or before January, 2016.

The worst is over. The best is yet to come.