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NetApp to Get a Pop from Sun-IBM Bust?

Options activity was heavy in NetApp yesterday as the company rolled out new storage and data management technologies that purportedly speed the operation of virtual desktop systems.

NTAP shares closed yesterday up 11 percent to $16.63, though they had risen by as much as 17 percent earlier. Options volume exceeded 53,000 calls halfway through yesterday's trading, dwarfing the average of 9,000 for a full session, according to OptionMonster's proprietary tracking systems.

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The April 17.50 calls traded 14,100 contracts, the May 17.50 calls traded 12,400 contracts, and the May 19 calls traded 5,900 contracts. The calls at all three strikes were massively more than their respective open interests, and the activity may indicate speculation that NetApp is due for a pop in the next month or so.

Barron's had published an article speculating that a takeover of Sun Microsystems by IBM would be negative for NTAP. The collapse of that deal could raise the possibility that Big Blue might consider NetApp instead.

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

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