BA in a Tailspin Following More Jet Drama

Boeing stock is off over 35% year-over-year

Assistant Editor
Feb 22, 2021 at 10:34 AM
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The shares of Boeing Co (NYSE:BA) are down 2.6% at $211.75 at last check, after the company recommended airlines suspend the Boeing 777 jet following an engine failure over Denver. The Federal Aviation Administration (FAA) ordered the inspection of some Boeing 777 jetliners that use the same Pratt & Whitney engine, and the effects are being seen abroad, with Japan's aviation regulator ordering the suspension of aircrafts with the same type of engine. This comes over a month after Boeing agreed to pay more than $2.5 billion in settlement money for concealing safety information that lead to two crashes which claimed a total of 346 lives.

Things were looking good for Boeing stock as it rose to $244.08 in November, more than double its March bottom. Since then, though, the stock has been cooling, and today's dip has the equity's 60-day moving average acting as a level of resistance once again. Year-over-year, and BA is off 35.1%.

The options pits lean significantly more bullish, with calls popular. This is per the equity's 10-day call/put volume ratio of 3.19 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than all but 3% of readings from the past year. This means calls are being picked up at a faster-than-usual pace.

So far today, 65,000 calls and 30,000 puts have exchanged hands -- double what's typically seen at this point. Most popular is the weekly 2/26 215-strike call, followed by the 220-strike call from the same series, and new positions are being opened at both. 

Lastly, BA options can be had at a discount currently. The stock's Schaeffer's Volatility Index (SVI) of 42% stands higher than just 8% of all other readings in its annual range, suggesting options players are pricing in relatively low volatility expectations right now. 

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