Options traders apparently think that Western Digital is headed lower.
OptionMonster's tracking systems detected heavy activity in the July 22.50 puts, which changed hands for $0.60 to $0.90 Tuesday morning. Volume surged to 20,882 contracts, more than three times open interest, with most of the trading in a strong buying pattern.
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The trades did not include obviously large institutional-size blocks, however, so they may be the work of investors acting on a newsletter recommendation.
Western Digital is down more than 2 percent to below $25 in afternoon trading. The hard-drive maker, up 48 percent in the last three months, needs to fall at least 10 percent from current levels for the puts bought today to generate a profit.
Puts in Western Digital outnumbered calls by more than 14 to 1, reflecting the bearish sentiment.
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David Russell is a reporter and writer for OptionMonster.