I know nothing about Spreads, how did this YUM Trade make money?

YUM was down to $67.60 and I am curious how this person made money using Spreads. I bought the book one of you recommend with the Study Guide and Video plus the 1300 pages of large information.

This trade was off the Option Radar Scanner as being one of the biggest trades on YUM. YUM is now at $69.30 and probably will open between $69.5 x $71 like it usually does after bad news. How much cash does someone make on this?

 

YUM been lighting up my options screens all week like rudolf the red nose reindeer.

 

thats a calendar spread so they shorted VOL the later spread makes money when there is a vol crush following earnings but its also skewed. Also they did puts not calls so they assumed it was a tank

 

No .... Both trades are directional Debit Spreads. The long legs were roughly ATM, short legs OTM - payoff will be huge.

EDIT: The short legs did cap the profit though - without them the payoff would have been much higher (assuming YUM trades at $70.00).

 

ur right, not a calender spread which is what i wouldve gone with although i dont really like events trades.

 

Nowhere does that chip indicate long or short so I'm not sure where y'all are seeing spreads of any sort.

 

Study the time stamp, price paid and compare it to the bid/ask. There are two debit spreads.

 

Hum, that reminds me of the naja-moron brothers on cnbc saying "someone bought", well that may be, but somebody also sold.

 

So what?

The OP was asking about the trade in the screenshot.

 

How can you say that is a debit? I see no such info