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Most Active Options Update: BlackBerry Ltd (BBRY)

One speculator is betting on a muted reaction to BBRY's earnings results

by 12/18/2013 3:09 PM
Stocks quoted in this article:

The 20 stocks listed in the table below have attracted the highest total options volume during the past 10 trading days. Names highlighted are new to the list since the last time the study was run, and data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. One name of notable interest this afternoon is BlackBerry Ltd (NASDAQ:BBRY).

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BlackBerry Ltd is slated to take its turn in the earnings confessional ahead of Friday's open, and one speculator in today's session isn't expecting much of a reaction to the results. In early trading at the Chicago Board Options Exchange (CBOE), one block of 10,000 weekly 1/3 6.50-strike calls changed hands at the bid price of $0.25 apiece. Implied volatility jumped 8.2 percentage points on the transaction, and volume easily outstripped open interest, pointing to the initiation of new short positions.

Ideally, BBRY will remain churning south of $6.50 (the stock was last seen lingering near $6.09) through the close on Friday, Jan. 3, allowing the calls to expire worthless, and the trader to retain the net credit collected as her full potential reward. Delta for the call is docked at 0.38, suggesting a 38% chance the option will be in the money at expiration. Should the call move into the money over the course of its lifetime, the trader could be assigned and subsequently on the hook to deliver the shares at $6.50 each, no matter where the security might be trading.

However, the call writer certainly has history on her side. Despite besting analysts' expectations in two of the past three quarters, the stock has gone on to shed, on average, 9.2% and 11.3% in the subsequent session and week, respectively. For BlackBerry's fiscal third quarter, Wall Street is calling for a per-share loss of 44 cents.

In today's session, BlackBerry Ltd (NASDAQ:BBRY) has snagged a slew of headlines, including the announcement of a new executive. Additionally, the smartphone maker said it had a patent dispute with MobileMedia Ideas LLC, and revealed that, in the near future, its BlackBerry Messenger app will come pre-installed on various Android phones.


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