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Option Brief: BlackBerry Ltd (NASDAQ:BBRY) has added 15.3% so far this week, and currently rests at $10.54. Furthermore, the stock is poised to close the month with an 11.5% gain, and options traders are expecting the shares to remain in double-digit territory through at least next week.
During yesterday's session, roughly 22,000 puts changed hands -- a 29% mark-up to the stock's average daily volume. Most popular was the weekly 3/7 10-strike put, where close to 4,600 contracts traded -- including a block of 2,000 that went off at $0.23, closer to the bid price at the time. Furthermore, open interest at the strike jumped by more than 4,300 contracts overnight, hinting at sell-to-open activity.
By writing the puts to open, the sellers want BlackBerry Ltd (NASDAQ:BBRY) to stay north of $10 through the close next Friday, March 7, when the options expire. In this best-case scenario, the puts will expire worthless, allowing the sellers to retain the entire net credit received at initiation. Until Tuesday's gap higher, the $10 level had provided a challenge for BBRY in 2014, but could now switch roles to serve as support. In addition, BBRY is on pace to end atop both its 10-month and 20-month trendlines for the first time since May, and this duo of moving averages could also translate into a foothold for the shares.