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Behind the huge bullish bet on Yum

Shares of Yum Brands have been on fire over the past month and a half. But one big options trader thinks they are set to go even higher.

In a massive trade Tuesday, one firm bet that shares of the fast food company will rise as high as $92.50 by January, a big jump from the day's closing price of $78.36, especially considering that the stock is up 15 percent since the middle of October.

Specifically, this trader bought 2,500 January 67.50/77.50/92.50 call spread risk reversals for a total of $1.35 per share. That means the trader bought the January 92.5-strike calls for $6.10, and financed the purchase by selling the January 92.50-strike calls for $1.50 and the January 67.50-strike puts for $3.25.

In order for the trade to make money, Yum shares must rise above $77.50 by more than the $1.35 spent, or above $78.85 by January expiration. Maximum profits come at $92.50, where the trader makes $13.65 per share, or $3.4 million in total. Below $78.85, the trader will lose $1.35 per share, and if the stock falls below $67.50, they will be forced to buy the stock at that level.

Read MoreHere's why traders are placing bullish bets on BP

The size of the trade also stands out. Given that 7,500 options contracts were traded, this single trade made up 68 percent of Tuesday's total daily volume in Yum options.

"Basically, this is someone who wants to try to ride Yum Brands if it continues to go up, but at the same time, they don't want to buy it up 14 percent off the low," Mike Khouw said Tuesday on CNBC's "Fast Money."

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