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Option Bears Bet Against Research In Motion Ltd (NASDAQ:BBRY)

The ranks of BBRY option bears expand as the stock tests newfound resistance

by 4/17/2013 2:06 PM
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Options traders are taking an increasingly bearish stance on Research In Motion Ltd (NASDAQ:BBRY), according to volume data from the major exchanges. During the past five days, speculators on the International Securities Exchange (ISE) and Chicago Board Options Exchange (CBOE) have bought to open 59,781 puts on BBRY, outstripping the 54,432 calls purchased during the same period.

From a broader view, Research In Motion Ltd has racked up a 10-day put/call volume ratio of 0.74 on the ISE, CBOE, and NASDAQ OMX PHLX (PHLX). This ratio ranks higher than 73% of other such readings taken during the past year, pointing to a healthier-than-usual appetite for bearishly slanted BBRY options. This ratio has ticked up considerably over the past week, as it stood at just 0.58 as of Wednesday, April 10.

It's been a volatile ride for BBRY shares lately, with last week's damning Detwiler Fenton report sparking a wave of short-term put buying. This news smacked the stock below support at its 80-day moving average, which is now emerging as a layer of resistance.

Generally speaking, most brokerage firms have a low opinion of BBRY. The stock sports only six "buy" or better ratings, paling in comparison to 11 "holds" and 13 "sell" or "strong sell" suggestions.

However, not everyone has abandoned the bullish camp for Research In Motion. On Tuesday, Jefferies backed its "buy" rating and $22 price target on BBRY, with analyst Peter Misek smacking down Detwiler Fenton's controversial report of abnormally high return rates on the Z10 smartphone. "Overall, our checks indicate typical return rates," he noted.

This afternoon, BBRY is up 0.7% at $14.00, trading just below its 80-day trendline at $14.18.


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