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June 5, 2013  Wed 9:35 AM CT

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A large volatility trade is targeting Pandora as the online radio company tries to stem this week's losses.

More than 11,000 July 16 calls have traded so far in volume far above the strike's previous open interest of 686 contracts, clearly indicating new activity. The big print of 8,000 went for the bid price of $0.70, according to optionMONSTER systems.

Less than a minute later, a block of 288,000 Pandora shares traded for $14.50--the exact delta of the option position. The prices are tight, so it is hard to tell if this is a long or short volatility play. Either way, this trader is concerned about the degree of the stock's movement, not a specific direction. (See our Education section)

P is up 0.82 percent to $14.51 after dipping to $14 earlier this morning. Shares were above $17 at the end of last week but fell on reports that Apple is making progress on a competing service.
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