SanDisk expected to make sharp move
Chris McKhann | [email protected]
A trader bought 2,550 July 62.50 calls for the ask price of $1.27, optionMONSTER systems show. The volume was 5 times the strike's open interest before the session began, clearly indicating new activity.
About 90 seconds later the biggest SNDK stock trade went off, with 61,200 shares sold for $54.9017. The combination of stock and option activity creates an overall position that is delta-neutral and therefore focused on higher volatility as opposed to the stock's direction.
The trader is looking for shares of the memory-chip maker to make a big move one way or the other and/or for the actual volatility to be greater than that implied by the option price. (See our Education section)
SNDK is up 0.85 percent to $55.23 today. That would be the stock's best close in more than five years, though shares were higher intraday on a number of occasions the previous two weeks.