how does wayne do it?, page-27

zzedzz. I'm sure you're aware that an option is an option to buy a share at a certain price before it expires.

In this case, December 2015. So the buyer makes parity on their investment if CDU is worth $3 before then or $3.50 to double their investment.

If they purchased instead shares at today's price, they would have doubled at $3. Therefore, they are assuming that the price of CDU gets well above 3. at $4, CDUO would have made them a 200% profit and a 176% profit from CDU.

So in short, the buyer is making a punt that CDU will be worth close to $4 or else they would have just purchased CDU today.