Why one trader is selling Shutterfly calls
Chris McKhann | firstname.lastname@example.org
optionMONSTER systems detected the sale of 3,400 May 47.50 calls for the bid price of $0.80. The volume was above the open interest, signaling a new position.
The calls could have been sold naked with an initial bearish bias, as the delta of the options suggests just a 25 percent probability that SFLY will be above $47.50 by expiration. Alternatively, the options could have been traded against long shares in a covered call strategy, which would be bullish up to that strike price but not beyond. (See our Education section)
SFLY is up fractionally on the day at $43.59. Shares of the photo-sharing service gapped above $40 from below $34 at the start of February and hit a 52- week high of $45.43 a month ago.
More than 4,500 SFLY options have changed hands so far today, compared to a daily average of 771.