Priv Launch Sparks Bullish Betting on BlackBerry Ltd (BBRY)

BlackBerry Ltd (BBRY) is speeding up the charts, amid the launch of its new Priv smartphone

by Alex Eppstein

Published on Nov 6, 2015 at 11:05 AM
Updated on Jun 24, 2020 at 10:16 AM

BlackBerry Ltd (NASDAQ:BBRY) is making a run at the crucial $8 level today, which it hasn't tested since late July, thanks to the well-received launch of its new phone, the Priv. In fact, the stock was last seen up 4.9% at $7.97 -- putting it on track for its first finish north of its 120-day moving average since late May, after weeks of the shares toppling several shorter-term trendlines. The reaction in BBRY's options pits has been enthusiastic, to say the least.

By the numbers, over 17,000 calls are on the tape -- representing five times the expected intraday amount, as well as a huge lead over the 3,500 puts that have been exchanged. In fact, a number of traders seem convinced BBRY will tackle $8 by day's end, buying to open the weekly 11/6 8-strike call, which expires tonight.

While these speculators are confident, the same cannot be said for the rest of Wall Street. For starters, close to 15% of BBRY's float is sold short. At the stock's average daily trading volume, it would take more than two weeks for these bears to cover their positions. In other words, there's plenty of sideline cash available to fuel the stock's rally, should short sellers begin to hit the exits.

Elsewhere, the brokerage bunch has taken an extremely negative view on BlackBerry Ltd (NASDAQ:BBRY). Of the 19 analysts tracking the equity, 15 have handed out "hold" or worse recommendations. If the stock can sustain its momentum, a round of upgrades could ensue -- potentially sparking increased buying demand.

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