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Option Clips: BlackBerry Ltd (BBRY), United Continental, and SINA Corp

Reviewing notable options activity on BlackBerry Ltd, United Continental Holdings Inc, and SINA Corp

by 2/25/2014 1:56 PM
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Three equities generating buzz on StockTwits today are smartphone maker BlackBerry Ltd (NASDAQ:BBRY), airline issue United Continental Holdings Inc (NYSE:UAL), and Chinese Internet concern SINA Corp (NASDAQ:SINA). Here's a look at how traders have been aligning their speculative bets today.

  • BlackBerry Ltd (NASDAQ:BBRY) is up 9.2% at $10.73, after the company debuted two new smartphones: the "classic," keyboarded Q20; and the Z3, which will retail for less than $200. In addition, the firm announced plans to launch BlackBerry Enterprise Service 12 (BES12), a new tool for business and government customers to unify existing platforms. Against this backdrop, BBRY's 30-day at-the-money implied volatility is up 7.8% at 79.7%, pointing to escalating demand for short-term options. In fact, the equity has seen roughly 90,000 calls cross the tape -- three times its average intraday volume, and more than double the number of BBRY puts traded. Digging even deeper, it looks like option bulls are buying to open the March 11 call, amid hopes that BBRY will topple $11 within the next few weeks.

  • United Continental Holdings Inc (NYSE:UAL) is flirting with a 3.8% lead at $47.83, after Stifel Nicolaus initiated coverage with a "buy" rating and a $60 price target. The shares of UAL have outperformed the broader S&P 500 Index (SPX) by more than 20 percentage points during the past two months, and option traders today are gambling on more upside, with intraday call volume running at six times the norm. Specifically, it appears some traders are buying to open the out-of-the-money March 55 calls to roll the dice on record highs for UAL, while more conservative bulls are purchasing to open the April 49 calls. Should more analysts follow Stifel's lead -- more than half the covering brokerage firms maintain "hold" or worse opinions -- UAL could enjoy additional contrarian tailwinds.

  • Finally, SINA Corp (NASDAQ:SINA) has surrendered 8.5% to trade at $69.60, as investors weren't impressed with the company's fourth-quarter earnings, reported last night. Analysts weren't impressed, either, with Brean Capital cutting its price target on SINA by $20 to $100, and Maxim trimming its target to $90 from $95. As a result of SINA's swoon, the security finds itself on the short-sale restricted list, prompting bears to take to the options pits. So far, roughly 9,800 SINA puts have changed hands -- more than double the stock's average intraday volume -- though nine of the 10 most active contracts are calls expiring within the next two months.


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