OptionsHouse

Options Trading News

November 1, 2012  Thu 10:36 AM CT

SNDK: SEE CHART GET CHAIN FIND STRATEGIES
One trader is betting that potential upside is limited for SanDisk even as the stock rallies today.

optionMONSTER's tracking systems show that a trader sold 4,554 December 45 calls for $1.32. The volume is well above open interest of 1,722 contracts at the start of the session, clearly indicating new activity.

SNDK is up 4.98 percent to $43.86, a day after its lowest close since the start of September. Shares of the memory-chip maker have been trending lower since trading above $46 later that month.

Today's call seller apparently believes that SNDK won't see rise much beyond the $45 strike price by expiration in December. Those options could have been sold naked with an initial bearish bias, or they could have been traded against an existing long position in the stock in a covered call strategy. The latter would be bullish up to the strike but not much beyond it. (See our Education section)
Share this article with your friends


Related Stories

SNDK

SanDisk draws downside trades

July 1, 2015

The memory-chip maker fell sharply after its last two earnings reports and is down some 40 percent this year to its lowest level since September 2013.

SNDK

Short-term bulls pile into SanDisk

June 17, 2015

The memory-chip maker has lost more than a third of its market value this year, gapping down twice on lowered guidance, but traders are looking for a near-term pop.

Invest Like a Monster - San Antonio: October 9-10

Premium Services

Archived Webinar

Education & Strategy

Real vs. Synthetic

We now know that there are two ways of creating a call position, a put position, and a stock position. We can simply use the actual real security or we can recreate it synthetically. We can create these positions in both long and short forms and this ability sets up an interesting scenario--an arbitrage!

View more education articles »