Weekly Boeing Call Scores 151% Profit in Just 5 Days

Weekly options contracts can net big gains in a shorter time frame

Managing Editor
Dec 16, 2022 at 11:00 AM
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Subscribers to Chart of the Week received this commentary on Sunday, December 11.

Last week, subscribers to our Weekly Options Countdown (WOC) service scored a 151% profit on our recommended Boeing Co (NYSE:BA) weekly 12/2 177.50-strike call. Below, we'll unpack the reasoning for the short-term bullish stance on BA.

We recommended the trade on Sunday night, Nov. 27, with entry for first-thing Monday morning. At that time, the aerospace giant was forming a November flag pattern that was breaking out of a recent downtrend. The shares had successfully retested their August peak and had reclaimed a confluence of moving averages with historically bullish implications, per the chart below.

BA Postmortem COTW

There was also heavy call open interest overhead at the 180- and 185-strikes, which meant a move higher could lead these levels to act as a magnet in the short term. Digging deeper, the stock's 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sat in the 91st percentile of its annual range. So, while calls still outflanked puts on an absolute basis, the high percentile indicated the rate of put buying was near its highest levels of 2022. An unwinding of these bearish bets would push BA higher.

On top of this upside potential, it was a good time to target BA options, as premiums were at a discount level. At the time, the stock's Schaeffer's Volatility Index (SVI) ranked near the bottom one-third of annual readings, hinting at unusually low volatility expectations among options traders. Further, the stock’s Schaeffer’s Volatility Scorecard (SVS) checked in at 75, which meant BA had regularly made bigger-than-expected moves on the charts on the past year, compared to what options traders had priced in.

While Boeing stock stumbled out of the gate on Nov. 28, the day the trade was initiated, it righted itself and closed the week 2.5% higher, nabbing at that time an eight-month high of $188.44. As with all weekly contracts, we closed our position at the Friday bell, allowing subscribers to collect a 151% profit in just five trading days.

Options volume has had a banner 2022; per the OCC data below, U.S. volume is on track for 10.32 billion contracts, 4% above 2021 and more than double the amount in 2019. Weeklies We discuss the rise in shorter-term contracts with Cboe Global Markets below, in our latest podcast.

If weeklies seem like your thing, you’re in luck! Schaeffer’s is running a holiday promotion for WOC. For December’s issue, we’re offering WOC for just $30. That’s six weekly trades, for a total of $30. Math isn’t my strong suit, but I’m pretty sure that comes out to $5 per trade! Click the link below to claim this year-end offer.

As for one of our latest product launches, we’re bringing you and extended version of Weekly Options Countdown, WOC Plus! With this subscription, you'll get your six profit-ready expiration option trades, AND an additional one to four trades sent straight to your inbox the Friday prior to options expiration.

OCC Data

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

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