* Digital River (DRIV) - Cheater? How to Make 1000% in Two-weeks.

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DRIV is trading $25.56, up 47% with IV30™ down 79%. The Symbol Summary is included below.

Provided by Livevol

Conclusion
DRIV is up 50% today on an announcement the firm will taken private for $26 / share.  The option activity prior to the takeover looks suspicious and frankly, a little bit too lucky.

Is it possible that all of the trades were a coincidence? Yes.
Do I think this was a coincidence: No.

Let's turn to the details and you can decide for yourself.



First, we can see the Stats Tab which shows us that DRIV averaged 542 calls traded per day across all months and all strikes.  If we take out the two days I am focusing on, that average falls to 430. Remember that number.

Provided by Livevol

On October 8th, 4,337 Nov. 18 calls traded for ~$0.75 on zero open interest, leading to 4,291 new long positions.  Again, the total daily average across all strikes and all months was 430.

Provided by Livevol


On October 9th (the next day), another 3,643 Nov. 18 calls traded for ~$0.75.  The next day there were 7,268 open long positions on that line alone.

Provided by Livevol


Fast forward to today... Those Nov. 18 calls are now worth ~$7.60 and the open interest (the long positions) are still there.

Provided by Livevol


So what do we have?...

Two consecutive days of trading saw 9x the total daily average volume in calls in a single strike that were bought for ~$0.75 and are now worth $7.50.

Easy enough, that's 1000% in two weeks or a $540,000 bet turned into $5.4 million.

Those were facts.  This is an opinion.

Is it possible that all of the trades were a coincidence? Yes.
Do I think this was a coincidence: No.

This is trade analysis, not a recommendation.

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