Hot Options Trading: What It Says for SanDisk

SanDisk shares are moving nearly 15 percent higher Wednesday, as talk of a renewed buyout bid by Toshiba hits the trading desks.

Options action is decidedly bullish with 6,000 April 10 calls (SWQDB) all trading all on the offer, according to OptionMonster's real-time tracking systems. Just 45 minutes into the trading day, volume of calls had already topped 20,500 versus the 20-day average of 8,000 calls for a full session.

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SNDK is already a partner of Toshiba, so the idea of a merger is not entirely out of the blue. But you may recall that SanDisk has been down this road before, having rejected an attractive bid a few months ago from Samsung in what was largely seen as a monumental missed opportunity. Samsung offered $26 per share for SanDisk, whose stock is now trading around $8.

Nevertheless, the new buyout rumors could generate interest in SNDK simply because the market has been virutally starved for merger news in the current economic climate.


I am long SNDK shares and calls.

Rival Chipmakers:


- Micron Technology
- Rambus
- LSI Corp.


- Samsung Electronics
- Lexar Media
- Renesas Technology


Jon 'DRJ' Najarian is a professional investor, CNBC contributor, and cofounder of OptionMonster.