FireEye's (FEYE) shares shot up by 4% today on yet another buyout rumor. Apparently, the company is not looking to sell itself until its annual revenues reach at least $1B, which is a pretty far reach from LTM data: (Source: Google Finance) I personally would never buy FireEye's shares because the company is ultimately unprofitable at this point in time. Moreover, it consumes cash in operations. I understand growth investors' mentality but I am not okay consistently seeing red on financial statements. However, I love to trade options on companies like FireEye. Their shares, due to the nature of the companies, are quite volatile, and this is great for me. Volatile stocks imply high option prices and large premiums on the options' time values. This is a perfect situation for mixed strategies, especially those seeking to capitalize on high implied volatility. One of the strategies is called calendar spreads: it involves buying and selling options of the same kind (i.e. only puts or only calls) and the same strike price but different expiration dates. Because FireEye's shares increased in price today, I would look at call options because implied volatility in them has undoubtedly increased. The actual trade I am eyeing is given below: (Source: optionsprofitcalculator.com) Increases in implied volatility (i.e. cost of options) is usually found the most in short-term options, while longer-term options are less traded and, therefore, receive less attention from option traders. Hence, changes in their implied volatility are typically less aggressive. With this particular trade, investors need to put upfront only about $9 per option contract (100 options). It is also the maximum risk for this strategy. This is not a lot of money at all. On the other hand, the maximum return is over four times higher: (Source: optionsprofitcalculator.com) I am personally comfortable receiving even half of the maximum possible return (that is, $20 per contract) because the risk-reward ratio even in this scenario is over 2:1. The break-even prices ($17.38 and $14.79 per share) imply a 16% "break-even window" (divide the difference between the break-even prices by the current market price of the underlying). This means that the stock has to end up trading ~8% higher or lower than the current market price at expiration (July 1st, 2016). On the other hand, the same "break-even window" for a straddle is only about 8%. Hence, in comparison with this popular non-directional strategy, the above-mentioned calendar spread is a lot more attractive from the risk-reward perspective. I am thrilled about the opportunity to earn a 4:1 return in just over two weeks! My calendar tells me that there are no upcoming events that can significantly impact the company's shares in during the trade's duration (e.g. the annual meeting was held yesterday). What do you think of this strategy?