The $196-per-share buyout offer from Microsoft has made LinkedIn's (LNKD) investors tons of money as the stock rocketed by about 50% in just one day: The best part about this offer is that it is a 100% cash payment. The market thinks the deal is likely to close, so the spread between the offer price and the current market price of the stock is only about 2.2%. The companies' CEOs indicated that the deal will likely close by the end of the year. This means that, if you buy LinkedIn's shares now, you will only earn about a 4% annualized return with this trade (and there is always a possibility that the deal will break, in which case your downside risk is pretty substantial - check out the pre-announcement price of LinkedIn's shares). The good news is that I have found you a deal to substantially multiply your return with the same type of trade but considerably limit your downside. The idea is to use a calendar spread involving LinkedIn's options. Typically, calendar spreads involve options with the same strike prices but different expiration dates. In our case, since we know that the deal will likely close in the next several months, we can use options with different strikes. Here is the trade I am proposing: (Source: optionsprofitcalculator.com) With this trade, investors buy the January 2017 $185 calls and partially finance them with $200 calls expiring in January 2018. In essence, this brings the effective purchase price of the stock up to $194.35 per share, which is 1% below the buyout price. If the stock ends up trading at $196 per share by the time of expiration of the front-month option (the January 2017 option), investors will pocket $1.65 per contract, which translates into a 17% return in less than a year (before subtracting the time value of the January 2018 option)! Of course, if the deal breaks, the stock will likely decline below $185 per share, in which case you lose 100% of your initial investment ($9.35 per contract, 100 options at least). We can chart the risk-reward ratio like this: (Source: optionsprofitcalculator.com) To be more precise, given the break-even price of $195.10 per share (transaction fees excluded), the actual expected return is 9.6% over the period (double that to get an approximation of the annualized return), while the risk is a staggering 100%. At first, this may sound like a bad deal - the risk-reward ratio is 1:0.1, which would be extremely poor in other situations but not this one. Consider this: if you wanted to play this trade with the stock, you would need over $19k to buy 100 shares, while the downside risk would be a lot more substantial than $935, or $9.35 per share (less than 5% of the position's size at initiation). At the same time, your maximum return would be around $4.40 per share, or just over 2%. Would this trade be more favorable to you? I don't think so. Hence, stick with what I propose and increase your position's size, if you want more exposure to this deal.