Odd Options Volume Moves SanDisk (SNDK)

SanDisk Corporation (NASDAQ: SNDK) had already warned of poor results ahead of earnings, but it offered continued guidance which was not good enough for even the most optimistic of investors.  SanDisk shares are up today, on what is a broadly down-day in the market after the warnings created a drop from about $50 to $44.50 and then from about $40.50 down to just under $36.00.  Today’s move may be tied to a very unusual options trade.

The call options were active in May if you look at the open interest but it is a trade out in the JULY-2012 $40 CALLS that really starts the interest here.  There have been more than 13,000 CALLS traded in the July expiration and the prior open interest was a mere 980 contracts.  This is representative of 1.3 million shares on a fully leveraged basis.

We would note that more than 5,500 contracts have traded at the same $40-strike price in the July PUTS but there was an open interest of 11,597 before taking today’s volume into consideration.

Another odd trading alert took place with more than 5,500 of the OCTOBER-2012 $31.00 PUTS trading hands today.  The prior open interest there was only 580 contracts in those PUT options.

SanDisk shares are up 2% at $36.64 and the 52-week trading range is $32.24 to $53.46.

JON C. OGG