"It may be personal, but Carl clearly wants to make money," said Jon Najarian, co-founder of TradeMonster, an options broker. "When he starts doing it this way, like he has in the past with levered derivative bets, he's looking for a monster return."
Icahn purchased just 2.5 million shares of Herbalife outright. The majority of his stake is represented by options contracts that give him the right to own 11.5 million shares on certain dates.
Because those options contracts are much cheaper than Herbalife shares, this position in Herbalife only cost him $214.1 million, according to the filing, much less than if he bought a 12.98 percent stake in stock alone.
What's more, Icahn told CNBC that he had done "a great deal of research" on the company, including speaking with Herbalife CEO Michael Johnson several times. "I don't make investments like this lightly," said Icahn.
Plus, if Herbalife's stock declines far enough, those options contracts become worthless, whereas the shares would retain some value in the event of decline short of bankruptcy.
(Months ago, the company said this in response to Ackman's allegations: "Herbalife operates with the highest ethical and quality standards, and our management and our board are constantly reviewing our business practices and products. Herbalife also hires independent, outside experts to ensure our operations are in full compliance with laws and regulations. Herbalife is not an illegal pyramid scheme.")
Now, those on Ackman's side argue that this was a cheap way for Icahn to induce a short squeeze. News of his stake rocketed Herbalife shares higher today, forcing others betting against the stock to buy back the shares they borrowed and sold short.
Icahn only added fuel to the fire by including in the filing yesterday that "reporting persons intend to have discussions with management of the Issuer regarding the business and strategic alternatives to enhance shareholder value, such as a recapitalization or a going-private transaction."
What's more, a portion of the options that Icahn bought expire in May, a relatively short time to bet on a story that Ackman thinks may take a long time to unfold. After all, Ackman's position against the company could be contingent on the FTC or SEC proving it is, in fact, a "pyramid scheme."
"Our conclusions are unaffected by who is on the other side of the investment," said Ackman to Scott Wapner in an email conversation. "Our goal was to shine a spotlight on Herbalife. To the extent that Mr. Icahn is helping achieve this objective, we welcome his involvement."
So maybe it is just personal, with Icahn trying to smoke Ackman out of his 20 million short position in just a few months.
At the same time, one should note that the filing shows that Icahn sold European-style put options, which by their nature can only be exercised at time of expiration, that are due in 2015.
That could be taken as further evidence that Icahn is not putting as much money as believed behind Herbalife, or it could mean he is willing to wait two years for this story to unfold.
"Whether it's personal or not, I think they're both in for the long haul," said Najarian.
—By John Melloy, with reporting by Scott Wapner
For the best market insight, catch "Fast Money" at 5 p.m. ET, and the "Halftime Report" at 12 noon ET each weekday on CNBC. Follow @CNBCMelloy on Twitter.
