Almost everyone has been waiting for news coming in from Diamond Foods, Inc. (DMND). If the company does come out with a plan for itself, the price could double due to short squeeze. The number of short shares stands at almost 10 million shares of the 22 million outstanding shares (close to 45%).
On the other hand, the company could be de-listed and the share price could drop down to zero. The company had earlier "falsified" financial information and has now missed its deadline to restate earnings as directed by the Nasdaq.
The stock has declined all the way down from it's 52-week peak of $96 to its 52-week low of $17.02, hit last Thursday. The best way to play this trade, I believe, is by buying a short-term put and a long-term call. On a personal note, I have bought a Sep 15 Put and a December 20 Call. I hope to make it big, no matter which direction the stock trades.
Additional disclosure: I have bought a Dec 20 Call and a Sep 15 Put.