SanDisk crashed by 1/4 in 4 days, institutions turned around and dumped 24 million to bet on it falling further.

Last Wednesday when I was watching SanDisk, there was still a $10.39 million deep out-of-the-money LEAPS Call coming in against the trend at the end of the session, with a strike price of 2800 and expiration in March 2027, clearly betting that the storage supercycle could last until the year after next. At the time, that looked more like a long-term odds bet for the year after next, and I didn't pay much attention—I didn't expect the narrative to completely reverse later: it dropped 14% on July 2nd alone, closed at 1744 on July 6th, and from the intraday high of 2335 on June 25th, it had already shrunk by a quarter in four days.

Even more glaring was the capital reversal on the same stock. On the morning of July 6th, someone dumped $23.82 million at once to buy Puts expiring on July 17th with a strike price of 1750, placing an order for 1854 contracts at the market price; below that, there were additional deep out-of-the-money Puts at 1350, and above, a small Sell Call at 1800 to cap the upside. Last week, they were still betting on the 2027 bull logic, and this week, institutions directly flipped to short the near month—the catalyst was Samsung's earnings forecast, indicating that the storage "good news is fully priced in," and SanDisk fell again to 1689 after hours.

Structurally, this is a bearish position with locked-in losses and open downside exposure: buying the 1750 Put, with the premium averaging about $128 per share, means if the underlying stock doesn't fall but rises, you lose at most that $128. The breakeven point is around 1621, and you only start making real money if it falls below that. DTE only goes until 7/17, and the at-the-money short bet is that the downtrend won't stop, but with storage stocks swinging 10%, 14%, chasing shorts is the same as catching a falling knife. If I really want to follow this direction, I'd rather wait for the after-hours low of 1689 to be confirmed broken intraday before taking another look; if it can't hold, it means the selling momentum is still there. Conversely, if the underlying stock reclaims the high of the 1837 bearish candlestick and fills this sharp drop, the bearish logic falls apart. The medium-to-long-term logic for storage is still there, and even if the market is volatile, entering to take a short position now is very easy to catch a falling knife.