To The Moon

I. Fundamentals

SanDisk and Kioxia are 25-year NAND partners, jointly operating the world's largest NAND production facility. Kioxia's earnings have a decisive impact on SNDK.

• Bullish: Kioxia's Q2 pricing rose +70%, and long-term agreements (LTAs) increased — signaling hyperscaler confidence in demand durability.

• Bearish: Kioxia's Q1 results and guidance missed expectations, raising concerns about a slowdown in the AI flash memory pricing cycle. Kioxia subsequently announced a 1-for-3 stock split and a buyback of up to ¥800 billion to stabilize sentiment.

• Key observation: With the stock having already fully corrected in July, Kioxia did not decline post-earnings. It is reasonable to expect SNDK may behave similarly, with price action likely oscillating within the expected range after earnings. Morgan Stanley maintains Overweight with a price target of 1,750.

II. Volatility Estimates and Key Levels

Based on the current price of 1,427 and IV of 133%, this week's (expiring 8/7, earnings after 8/5 close) implied move is approximately ±15%, corresponding to a range of roughly 1,210–1,640 (bounded by the MA60 at 1,224 and the MA120 at 1,661).

Combined with options data (SNDK options are thin, wall levels should be used as reference only):

• Inflection point at 1,264 / Max pain at 1,300: The current price is well above the inflection point, but the max pain level at 1,300 acts as a gravitational pull to the downside.

• Upside resistance: 1,450 → 1,500 → 1,600; Downside support: 1,370 → 1,300 → 1,250.

III. Block Trade Analysis: Long-Term Bullish + Short-Term Cap + Tail Protection

• Heavy long-term bullish bet: Bought the June 17, 2027-expiry 1,020 Call $SNDK 20270617 1020.0 CALL$ , notional value of $125 million — big money betting on medium-to-long-term upside (aligning with LTA / demand durability thesis).

• Deep OTM crash protection (non-directional bearish): This week's 800 Put$SNDK 20260807 800.0 PUT$ opened 7,217 contracts ($585,000). Note: 800 represents -44% from the current price of 1,427 — this is extremely cheap tail protection.

• Short-term cap: Sold this week's 1,370 Call$SNDK 20260807 1370.0 CALL$ + bought the 1,400 Call$SNDK 20260807 1400.0 CALL$ (Bear Call Spread), betting that this week's close will be below 1,370.

• Summary: Long-term bullish, but near-term cautious with a cap, plus crash protection — i.e., medium-term constructive, but not chasing higher into this earnings report.

IV. Three Scenarios and Corresponding Strategies (Illustrative, Not Recommendations)

Scenario 1: Range-bound oscillation (1,210–1,640, move ≤ ±15%) — if it mirrors Kioxia's post-earnings "already corrected, no decline" script

Earnings in line, no major surprises. IV collapses sharply from 133% (IV crush) — favors sellers:

• Consider an Iron Condor: Sell Puts below 1,250 and sell Calls above 1,500, using long legs to cap both ends (the 1,370/1,400 Bear Call Spread above is a similar approach).

• ⚠️ SNDK options have thin liquidity, wide bid-ask spreads, and extremely high IV — Iron Condors are harder to execute with significant slippage. Position sizes must be minimal; use only defined-risk strategies and absolutely avoid selling naked.

Scenario 2: Breaks above 1,640 (memory pricing / guidance beats expectations)

A high-volume breakout. At extremely high IV, buying naked Calls will get crushed:

• Consider a Bull Call Spread, e.g., buy 1,500 / sell 1,640, to keep costs under control.

• More conservatively: wait for a confirmed retest after the breakout before following the trend (thin liquidity makes false breakouts more likely).

Scenario 3: Breaks below 1,210 (fears of pricing cycle peak materialize / poor guidance)

Breaks below 1,370 → 1,300 support:

• For trend followers: Consider a Bear Put Spread, e.g., buy 1,300 / sell 1,210, to control costs.

• Don't rush to catch the falling knife. Wait for stabilization and IV to subside, then sell Puts in staggered lots at strong support levels for long-term positioning (SNDK's long-term thesis remains intact, consistent with the 1,020 LEAP Call block trade).

⚠️ Disclaimer: The above is an observational analysis of public options data and a strategy illustration, provided for educational and discussion purposes only. It does not constitute investment advice. SNDK has IV of 133% and thin options liquidity; any price level is probabilistic. Investing involves risk; options are derivative products. In this environment, naked buying and selling carry exceptionally high risk, along with significant slippage.