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Friday, October 24, 2014

Well-timed bullish option bets seen in Digital River weeks before deal, (NASDAQ: DRIV)

Well-timed bullish options bets on Digital River Inc were placed about two weeks before the e-commerce services company said on Friday it would be taken private. Digital River's stock rose 48 percent to $25.75 on Friday, a day after the Minnesota-based company said it entered into an agreement to be bought by an investor group led by Siris Capital Group LLC for $26 a shares.A fortnight before the deal was announced there was a sudden spike in options activity with nearly 28,000 calls traded between Oct. 6 and Oct. 13, according to options analytics firm Trade Alert data.The average daily volume on Digital River from the beginning of the year till Oct. 6 was 36 calls, according to Trade Alert.A lot of the call activity during these six days was in calls at the $18 strike set to expire on Nov. 22.

Digital River, Inc. (Digital River) provides end-to-end global cloud-commerce, payments and marketing solutions to a wide variety of companies in software, consumer electronics, computer games, video games and other markets. Shares of DRIV traded higher by 46.84% or $8.14/share to $25.52. In the past year, the shares have traded as low as $13.61 and as high as $19.67. On average, 231483 shares of DRIV exchange hands on a given day and today's volume is recorded at 6795121.