Seagate Has Room to Rise, Options Show

By Jon "DRJ" Najarian, co-founder of OptionMonster.

Seagate Technology(STX Quote) climbed as much as 11% after unveiling a new product line, and options suggest traders are expecting more gains.

Call options in the hard-disk-drive maker exceeded normal trading volume by 10 times. Based on heavy trading in June contracts, there's talk that Seagate may be considered a takeover candidate.

By mid-session, volume had already topped that of the past 30 days -- six times over. Particularly in the staid world of computer hardware, that's not likely to have been caused by a product release.

Having said that, the debut of Seagate's BlackArmor suite for small businesses and self-employed entrepreneurs was fortuitously timed as the Nasdaq 100 index was down today. Rivals Western Digital(WDC Quote) and SanDisk(SNDK Quote) also increased, though not as much.

The writer has a position in STX.