Stocks quoted in this article:
Option Brief: BlackBerry Ltd (NASDAQ:BBRY) call volume is running at more than 10 times put volume this afternoon. By the numbers, about 26,000 calls have been exchanged, compared to fewer than 2,500 puts.
Attracting the most attention is BBRY's June 8 call, where more than 12,000 contracts -- including a block of 9,033 -- have changed hands. Nearly 90% have traded at the ask price, suggesting they were purchased, and volume has edged out open interest, implying at least some of the positions are being newly established.
The goal of today's call buyers is for BBRY shares to charge north of $8 -- from their current perch at $7.17 -- by the closing bell on Friday, June 20, when the options expire. Of course, with nearly 21% of the stock's float sold short, it's also possible the long out-of-the-money calls are intended to serve as protection against a potential rally. The company is slated to report quarterly earnings the morning before June options expiration, and scheduled events such as these can often serve as a catalyst for a stock. No matter what happens, the most the traders have on the line is the initial cash outlay.
While BlackBerry Ltd (NASDAQ:BBRY) hasn't made much headway in 2014, the stock appears to be consolidating above the $7 level, which served as support in late December. What's more, with a 14-day Relative Strength Index (RSI) reading of 25, the shares are in oversold territory, meaning a near-term rally could be in the cards.