Schaeffer's Options Center
Sponsored by:
Schaeffer's Daily Option Blog

Boeing Earnings Draw Short-Term Bulls

Dreamliner concerns, bearish trends could be concerns for weekly BA call buyers

by 1/31/2013 10:59 AM
Stocks quoted in this article:

Short-term bulls rushed in to buy calls on The Boeing Company (NYSE:BA 74.35) Wednesday, possibly looking to cash in on the company's stronger-than-expected earnings and take some profit before the ongoing Dreamliner 787 grounding pulls BA shares down. Overall, call volume nearly doubled what is seen on an average trading day, while put volume was only slightly above normal levels.

The weekly 2/1 75-strike call was especially in play, with nearly 5,800 contracts trading, the majority of which changed hands at the ask price. As volume exceeded existing open interest, it was likely that at least some of these trades were bought to open. Given the volume-weighted average (VWAP) price of $0.35, the stock would need to jump 1.3% to $75.35 (strike price plus VWAP) by Friday's close in order for these calls to be profitable; otherwise, the traders would only be out the premium paid.

There are some possible headwinds between now and Friday's strike date, however. Shares jumped 1.3% Wednesday after BA announced fourth-quarter 2012 earnings per share of $1.28, roundly beating the consensus estimate of $1.19. However, BA shares were off slightly this morning as the market opened, and worries about the battery problem surrounding the Dreamliner continue to plague the company. One report indicated that BA's largest Dreamliner customer -- All Nippon Airways -- has already lost $15 million from the grounding. The Federal Aviation Administration grounded the 50-plane fleet nearly three weeks ago because of several battery fires, and all other countries quickly followed suit.


Featured Brokers
Unusual Option Volume
Option Flow
Most Active Stocks
Most Active Option Strikes
Largest Open Interest

Partner Center

© 2015 Schaeffer's Investment Research, Inc. 5151 Pfeiffer Road, Suite 250, Cincinnati, Ohio 45242 Phone: (800) 448-2080 FAX: (513) 589-3810 Int'l Callers: (513) 589-3800 Email:

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

Market Data provided by | Data delayed 15-20 minutes unless otherwise indicated.