Western Digital Corp closed at $451.52, down 13.03%. Despite the sharp sell-off, a massive $1.66 million short put trade dominated the tape, revealing a deep-pocketed conviction that downside is limited. The activity was overwhelmingly bullish, with traders selling premium at distant strikes to collect income, signaling a long-term constructive view rather than panic.

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Options Indicators

WDC’s implied volatility stands at 85.49%, while its IV percentile is 62.95%, which places current volatility conditions in a broadly neutral range rather than an extreme one. Even though the absolute IV level is high, the percentile suggests this is not especially stretched versus WDC’s own recent history, so options are not clearly cheap or excessively expensive at the moment. The IV/HV ratio of 0.87 also indicates implied volatility is running below historical volatility, suggesting current option premiums are not aggressively overpricing realized movement. The Call/Put volume ratio is 1.04.

Large Trades

A PUT sale worth $1.66 million stood out as the key large trade, with 7,000 contracts of the September 18, 2026 $250.00 put sold while the stock reference price was $451.52. This was a single-leg, out-of-the-money short put position, indicating a moderately bullish stance. By selling a strike far below the current share price, the trader is expressing confidence that WDC will remain above $250.00 through expiration, allowing the option to expire worthless and the premium to be retained. Strategically, this type of trade is often used either to generate income from premium collection or to express willingness to acquire shares at a much lower effective entry level if assigned. Overall, the large-trade flow in WDC was clearly bullish. The activity was entirely concentrated in bullish premium-selling, with no meaningful bearish large-trade presence in the data, suggesting traders were comfortable taking downside risk at a distant strike in exchange for income. That pattern points to market participants viewing the stock’s downside as limited over the longer-dated horizon and favoring a constructive outlook rather than positioning for weakness.

Strategy Reference

For those seeking low assignment probability, selling the December 2026 $200.00 put offers a wide buffer below the $250.00 floor while capturing elevated premium; alternatively, a $250.00/$200.00 put credit spread can define risk and reduce margin requirements for a similarly bullish thesis.