Checking In on Boeing Stock Ahead of Earnings

Boeing will report second-quarter earnings next Wednesday

Deputy Editor
Jul 24, 2020 at 11:20 AM
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As earnings season rages on, investors will be combing over quarterly reports from blue chips in another packed session next week. One in particular, Boeing Co (NYSE:BA), will post its second-quarter results before the open on Wednesday, July 29. The stock was last seen up 1.4% at $178.85, though pressure felt by the broader flight sector due to COVID-19 has kept BA at a roughly 45% year-to-date deficit. 

A broader look shows the descending 120-day moving average wiping out BA's early June rebound and acting as a stiff ceiling on the charts ever since. And while, the $42 level does look to be keeping some of these losses in check, the equity is now looking to wrap up its third-straight month in the red. 

BA Chart July 24

Despite this, options bulls are coming out of the woodwork ahead of the event. In fact, BA sports a 10-day call/put volume ratio of 2.51 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than all other readings from the past 12 months, suggesting long-calls haven't been more popular. 

Adding to this, Boeing's Schaeffer's put/call open interest ratio (SOIR) of 0.69 ranks in the low 14th percentile of its annual range, meaning short-term options traders have rarely been more call-biased. 

Now looks like a good time to get in on BA with options, too. Despite next week's earnings report, Boeing's Schaeffer's Volatility Index (SVI) of 68% is lower than 77% of all other readings from the past year. This suggests options players have been pricing in relatively low volatility expectations of late. 

This bullishness could have something to do with BA's earnings history. During its last eight reports, BA was higher one day later 75% of the time, including a 5.9% next-day pop the day after its last report, and a 6.3% jump in January 2019. This time around, the options pits are pricing in a 7.1% post-earnings move, much bigger than the 2.5% swing BA averaged during the past two years, regardless of direction. 


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