Options Bulls Pile on Blackberry Stock After Bull Note

Year-to-date, the equity is still more than 21% lower

Digital Content Manager
Mar 21, 2022 at 10:19 AM
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BlackBerry Ltd (NYSE:BB) is up 2.9% to trade at $7.24 at last check, after scoring an upgrade from RBC to "sector perform" from "underperform." The brokerage firm kept its price target at $7, with the analyst in coverage noting BB's "valuation has normalized."

Today's jump has Blackberry stock pacing for its first close above the 40-day moving average since November. The equity is bouncing off a March 14, annual closing low of $5.88, and broke through a ceiling at the $7 level last week. Year-to-date, BB remains 21.3% lower.

While short sellers are hitting the exits, bears are still in control. The 33.62 million shares sold short account for 6% of the stock's available float, or about four days' worth of pent-up buying power.

Meanwhile, the options pits lean firmly bullish. This is per Blackberry stock's Schaeffer's put/call open interest ratio (SOIR), which ranks higher than just 1% of readings from the past year, indicating short-term options traders have rarely been more call-biased. 

Drilling down to today's options activity, 14,000 calls and 2,008 puts have crossed the tape, which is four times the intraday average. Most popular is the 3/25 8-strike call, where new positions are being opened, followed by the 7.50-strike call in the same weekly series.

These options traders are in luck, since BB's Schaeffer's Volatility Index (SVI) of 74% sits in the low 7th percentile of its annual range. This means options traders are pricing in lower volatility expectations for the equity, making now a good time to speculate on the stock's next move with options. 

 




 
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