The options market could reflect companies that may have recently experienced large price swings in recent trading sessions. In the options market, large price swings also increase the cost of the call or put. This is because an option has a time and volatility in its price. Technology stocks often exhibit wild swings. Investors looking for buying and selling ideas could look at the list below for short-term trading ideas with a wide buy or sell point:
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1. SanDisk Corp. (SNDK, Earnings, Analysts, Financials): Designs, develops, manufactures, and markets NAND-based flash data storage card products that are used in various consumer electronics products. Market cap at $13.21B, most recent closing price at $54.64.
A call option expiring in April experienced a 179.6% rise in volatility, as shares close near a 52-week high. An analyst at RBC said the company is a better short-term play than Micron (MU). DRAM and NAND pricing improved, and are benefiting both firms. Supply and demand for NAND flash is balanced, as smartphone sales continue to growth.
SanDisk NAND flash is used in Samsung phone products. SanDisk is transforming its business, by becoming a "vertically integrated" flash memory supplier for OEMs. By bringing its focus on the OEM market instead of retail, SanDisk reduces its risks on consumer taste, transferring those risks to suppliers.
2. Nokia Corporation (NOK, Earnings, Analysts, Financials): Provides Internet and digital mapping and navigation services worldwide. Market cap at $13.08B, most recent closing price at $3.40.
A call option expiring in April with an exercise price of $3 has an implied volatility of 67.3%. Nokia shares dropped steadily since January, as competitors introduced new products and investors took profits. Windows Phone 8 sales were surprisingly strong in Nokia’s last quarter, and the company is releasing Lumia-based budget phones to increase market share. In April, a Lumia 928 model is scheduled to be released on the Verizon network in April 2013.
Nokia’s NSN unit reported strong results last quarter. NSN issued debt to refinance existing obligations.
3. STEC, Inc. (STEC, Earnings, Analysts, Financials): Designs, manufactures, and markets enterprise-class flash solid-state drives (SSDs) for use in high-performance storage and server systems. Market cap at $238.73M, most recent closing price at $5.10.
STEC sold off sharply after providing quarterly guidance of a loss of $0.40 to $0.42 per share. Revenue is expected to be between $21 million and $23 million. STEC is transitioning away from sales to OEMs. The changing focus was the blame for the weak quarter. STEC has some risks: in the second-half of 2012, one non-OEM customer represented more than 10% of total sales. Gross margins also dropped by 8.7% from the previous year to 32.8%.
On the options market, volatility dropped for options expiring in April. The put option with an exercise price of $5 traded at $0.35, while the equivalent call traded at $0.13.
Written by Chris Lau
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Dig Deeper: Access Company Snapshots, Charts, FilingsSanDisk Corp. (SNDK, Chart, Download SEC Filings) Nokia Corporation (NOK, Chart, Download SEC Filings) STEC, Inc. (STEC, Chart, Download SEC Filings)
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