Boeing Buzz Drags Stock in Early Morning Trading

BA looks to have exceeded options traders' volatility expectations during the past year

Managing Editor
Sep 9, 2019 at 9:17 AM
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Shares of airplane manufacturer Boeing Co (NYSE:BA) are moving lower this morning, after the company on Saturday announced the postponement of its new widebody 777x aircraft. Boeing said the cargo door failed a ground test, which comes just after a previous delay from General Electric's engine problems that were already said to be pushing the model's first flight into 2020. 

At last glance, BA is down 1% at $359.17 in early trading, adding fuel to its already volatile year on the charts. As of Friday's close, the aircraft maker has shed 18.6% from its March 1 record peak of $445.95. And despite recent buzz regarding its 737 Max jets back in August, newfound pressure from the 150-day moving average and coinciding $370 level have capped any breakout attempts since late July. Regardless, BA is clinging to a 12% lead year-to-date.

Taking a look at data on BA, the security's Schaeffer's Volatility Index (SVI) of 24% registers in the low 17th percentile of its annual range. This means that near-term options premiums are pricing in unusually low volatility expectations. Likewise, Boeing stock hosts a Schaeffer's Volatility Scorecard (SVS) of 81 (out of a possible 100), meaning the security has handily exceeded options traders' volatility expectations during the past 12 months.

Lastly, the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.10 registers in the 82nd annual percentile. This indicates that short-term traders are more put-heavy than usual toward the aerospace stock.

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