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Will Western Digital Continue Its 'Extraordinary' Run?

Western Digital saw heavy trading in both stock and options yesterday ahead of its earnings report after the market closes today.

Western Digital ended the regular session up 3.52 percent to $31.47 and rose another 1.27 percent in after-hours trading. The price is now more than triple the lows of November and more than double the lows of March.

Options trading was active early in the August 32 calls, which saw volume double in a matter of minutes yesterday morning, according to OptionMonster's real-time tracking systems. By the end of the day more than 5,500 calls had changed hands at the strike, eight times the open interest, for prices ranging from $0.95 to $1.45.

Western's shares would need to rise between 4.7 percent and 6.2 percent at minimum for those calls to turn a profit by the time they expire on Aug. 21. Western Digital calls at all strikes outnumbered puts by more than 12 to 1 yesterday.

The data storage sector has been on an extraordinary run, with stellar performance among several names. Last Wednesday, Seagate Technology raised its forecasts for margins and overall industry sales, citing a larger-than-expected increase in corporate demand for computers.

Disclosure:

Pete Najarian owns a call spread in Western Digital.

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Options Trading School:

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Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC's "Fast Money" and co-founder of OptionMonster.com.

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