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Options Action: Western Digital

For Wednesday's Options Action, Mike Khouw of Cantor Fitzgerald is looking at Western Digital .

The technology space, especially hard disk drive manufacturers, are "really beaten up," Khouw said. But shares of Western Digital pushed higher after the company caught an upgrade from Morgan Stanley Wednesday. The firm said a lot of the headwinds have been baked into the stock, including some downward revisions and earnings estimates.

Khouw suggests a buy right.

***MIKE'S WDC TRADE****
Buy the stock at $25 and sell Jan. 27 calls against it at $2.25

To learn more about this trade, watch the video now!



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Trader disclosure: On Sept. 1st, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour owns (AAPL), (INTC), (MT), (F), (MSFT); Adami owns (AGU), (BTU), (NUE), (C), (GS), (INTC), (MSFT); Adami’s wife works at Merck; Jon Najarian owns (AAPL); Jon Najarian owns (RIMM) calls; Jon Najarian owns (CRUS) and (CRUS) calls; Jon Najarian owns (AKS); Jon Najarian owns (NFLX) short calls; Jon Najarian owns (AMZN) short calls; Cortes is long Crude Oil; Cortes is long (FCX); Cortes is long (BHP); Cortes is long (SFD); Cortes is long (BMO); Cortes is long (TD); Cortes is long the Euro

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