BlackBerry Ltd (BBRY): Bullish Betting Picks Up Amid BuyoutSchaeffer's Daily Option Blog
BlackBerry Ltd call buyers are eyeing the $10 level
by Alex Eppstein 7/24/2014 10:52 AM
BlackBerry Ltd (NASDAQ:BBRY) calls are trading at more than double the usual intraday clip, and roughly six times the rate of puts. Short-term contracts are in demand, too, based the mobile phone stock's 30-day at-the-money implied volatility (IV), which is 3% higher at 47.7%.
Getting into specifics, traders are targeting BBRY's weekly 7/25 10-strike call, where more than 7,100 contracts are on the tape -- nearly double the next most active option. A healthy portion of these calls have crossed at the ask price, and IV has popped 10.1 percentage points, hinting at buy-to-open activity. Data from the International Securities Exchange (ISE) supports this theory, as well.
By purchasing the near-the-money calls for a volume-weighted average price (VWAP) of $0.13, the traders are expecting BBRY to rally past $10.13 (strike plus VWAP) by tomorrow's close, when the weekly options expire. At last check, the shares were 1.2% higher at $9.95, and earlier hit an intraday peak of $10.19. North of breakeven the traders will rack up additional profits; however, if BBRY closes tomorrow below the strike, they risk parting with the initial premium paid.
Elsewhere, rumors are swirling that electronics giant Samsung may purchase BlackBerry Ltd (NASDAQ:BBRY), which may help to explain the latter's intraday gains. Longer term, the shares have been struggling a bit since since Apple Inc. (NASDAQ:AAPL) and International Business Machines Corp. (NYSE:IBM) joined forces, but seem to have found a foothold in the $9.70-$9.80 region.
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