Boeing Stock Retreats from Call-Heavy Strike After 737 Crash

BA is pacing for its worst day since 2001

Mar 11, 2019 at 9:44 AM
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The shares of Boeing Co (NYSE:BA) are crumbling today, after one of the firm's 737 Max 8 planes run by Ethiopian Airlines crashed over the weekend -- resulting in 157 fatalities, and marking the second deadly crash for this specific plane in the last six months. In reaction, China, Indonesia, and Ethiopian Airlines have grounded 737 Max 8 aircraft.

At last check, BA stock was down 12.7% to trade at $368.89 -- a level not seen since a late-January post-earnings bull gap -- headed for its biggest one-day drop since Sept. 17, 2001, when it plunged 17.6%. The shares have been pulling back since topping out at a record high of $446.01 on March 1, and brought their daily losing streak to five on Friday, closing at $422.54. The last time Boeing logged six straight daily losses was November, when it closed lower for 11 consecutive sessions.

Analysts have yet to chime in on Boeing this morning, but sentiment among the brokerage bunch is mostly bullish. While 14 of 16 covering analysts maintain a "buy" or better rating on BA stock, the average 12-month price target of $446.50 sits in uncharted territory.

Meanwhile, following a 16.1% plunge in the most recent reporting period, just 4.41 million BA shares are sold short. This represents a slim 0.8% of the stock's available float, and would take only one session to cover, at the average pace of trading.

In the options pits, though, some speculators appear to have set a short-term ceiling for the Dow stock. The March 445 call is home to peak open interest of 4,361 contracts, and data from the major options exchanges points to mostly sell-to-open activity here.

 


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