Harley-Davidson's (HOG) stock surged by almost 20% on Friday after rumors of a potential buyout by KKR, a famous private equity firm, emerged: $HOG, Harley-Davidson, Inc. / 60 Although Market Watch claims that the one-day return is the highest since 2009, the stock is actually down over 3% on a 52-week basis:(Source: Google Finance)Neither KKR, nor Harley-Davidson's management commented on the rumors. In the meantime, stock volume surged to 23M shares, which is over 10x higher than the average volume. At the same time, however, option volumes (especially in August puts) rocketed:(Source: Yahoo Finance)The actual options table for the August's expiration looks as follows:(Source: Google Finance)Take a close look at the $45 and $50 puts expiring in August: somebody (or a group of investors) is essentially short almost 2.5M shares as of last Friday. One can argue that these can be insiders selling puts on the "sure" information that the company will be acquired. This may seem plausible, however, why would one want to sell cheap puts in this case? These particular puts lost 50%-60% of their value in one day. Selling on the bottom of the market seems counter-intuitive to me. In addition, the risk-return profile of this trade is simply not justified: if the rumors are proven wrong, the stock will likely collapse back to the $45 level, in which case the puts' sellers would have to buy the stock at expiration, spending around $112M (!) of own money and getting stuck with an underperforming security (as historical data show). Besides, nobody knows at what price the buyout may be completed, if the rumors, in fact, will turn out to be true. If I were an insider, I would rather buy call spreads in order to make an almost certain return at minimum risk.What I think is going on is some more knowledgeable investors are capitalizing on the opportunity to snap up some cheap puts and make same quick money at a minimum risk (the entire position with the two strike prices is currently worth around $4.3M). Finally, I do not see much action with the calls for any expiration date (believe me, I have checked them all). I recommend that investors look at the opportunity of getting into a short position with this stock or buy some puts with the same or analogous strike prices (this is more safe from the upside exposure standpoint). What do you think?