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Option Brief: BlackBerry Ltd (NASDAQ:BBRY) extended Friday's post-earnings gains into yesterday's session, despite the stock being downgraded to "sell" from "hold" at Hudson Square Research. Meanwhile, calls had the upper hand in the security's options pits, with 110,000 contracts crossing the tape -- more than double the norm -- versus just 43,000 puts.
One option garnering notable attention on Monday was the weekly 12/27 8-strike call, where nearly 9,200 contracts changed hands. Since the majority of the calls traded at the ask price, and open interest climbed by 6,551 contracts overnight -- the most among yesterday's actively traded strikes -- it can be assumed that new bullish bets were added here.
In other words, the traders are counting on the smartphone maker to ascend past the $8 mark by this Friday's closing bell, when these weekly options expire. However, given the stock's recent gains -- and the fact that 32.9% of BBRY's float is sold short -- it's possible that some of yesterday's out-of-the-money call buyers were actually skeptics looking to hedge their bearish positions through the end of the week.
Although BlackBerry Ltd (NASDAQ:BBRY) has seen its share of ups and downs in 2013, the security has been in recovery mode lately, gaining 21.5% so far this month. At last check, the stock was up about 3% today to trade at $7.69.