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Shutterfly draws call buyers at highs

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Shutterfly attracted bullish option activity as it rose to a new 52-week high on Friday.

optionMONSTER's Heat Seeker system detected the purchase of 3,000 September 50 calls just seconds apart in the session, led by a print of 2,526 that went for $5.10. Open interest in the strike was just 195 contracts before the trade appeared, indicating that this is fresh buying.

SFLY jumped 7.17 percent to finish at $52.19 on Friday after hitting $52.57 just before the close, its highest price since September 2011. The stock spiked higher in mid-May after billionaire investor George Soros reported that his hedge fund had increased its holdings in the photo-sharing service. The company is scheduled to announces its next quarterly results on July 24.

Friday's long calls , which lock in the purchase price for the stock, will track the share price closely because they are in the money . These contracts are betting that SFLY will rally above $55.10 by mid-September but will expire worthless if share remain below the $50 strike price. (See our Education section)

Total option volume was 7,146 contracts on Friday, 13 times its daily average for the last month. Calls outpaced puts by 7.5 to 1, a reflection of the session's bullish sentiment.

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