Western Digital Stock Surges on Loan Buzz, Upgrade

Call traders are blasting WDC in response

Laura McCandless

Deputy Editor

Sep 20, 2023 at 11:00 AM

Western Digital Corp (NASDAQ:WDC) hit a fresh 52-week high today, after Bloomberg reported Kioxia Holdings' lenders are planning to refinance 2 trillion yen ($13.5 billion) in loans to support a potential merger with the former's flash memory business. In addition, Exane BNP Paribas upgraded the shares to "outperform" from "neutral."

At last glance, WDC was up 6.2% at $46.66, earlier hitting a peak of $46.89. The stock has been chopping higher, with help from its 80-day moving average. Since the start of the year, the equity is up 47.3%.

Options bulls are chiming in on the news. So far, 15,000 calls have been exchanged -- eight times what's typically seen at this point -- in comparison to 1,821 puts. The weekly 10/13 47-strike call is the most popular, with new positions being opened there.

These options are well-priced at the moment, too. WDC's Schaeffer's Volatility Index (SVI) of 33% sits in the low 9th percentile of its annual range, meaning options traders are pricing in low volatility expectations.

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