McDonald's shares are rallying on a rumor that Bill Ackman is taking a stake in the company, and pushing for the fast food giant to spin properties off into a tax-efficient real estate investment trust.
The stock is up 3 percent in two days on the chatter.
In addition to the stock, bullish call options are hot. On Tuesday, the most popular option was the December 90-strike calls (which expire on Friday), which traded at an average price or $0.54. In order for these bets to pay off, the Dow component would need to finish the week above $90.54, or 2 percent above Tuesday's close.
"Obviously traders are getting in on the rumor, looking to play the momentum," Dan Nathan of RiskReversal.com said Tuesday on CNBC's "Fast Money." But "I don't really put a lot of merit into it…. If this rumor doesn't pan out, I would expect to see some selling."
When he was asked directly about the chatter on Bloomberg Television, Ackman said he couldn't comment. However, some market participants appeared to take that response as a tacit confirmation, leading the stock to rise swiftly on Wednesday morning.