Boeing Stock Grounded by Another 737 Mishap

BA put volume is running at six times the intraday average

Deputy Editor
Aug 24, 2023 at 10:21 AM
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Boeing Co (NYSE:BA) reported a new manufacturing flaw involving fuselage supplier Spirit AeroSystems (SPR) that will slow deliveries of its 737 Max. In another part of an ongoing saga of mishaps with the company's bestselling aircraft, Boeing yesterday said the fastener holes on some planes' aft pressure bulkheads were improperly drilled.

In response, the shares of Boeing went down 3.9% right after the open and were last seen trading at $219.73. The stock's 50-day moving average appears to be keeping the damage today in check. Over the last 12 months, the equity is up 39.7%. 

Options bears are chiming in after the news, with 20,000 puts exchanged so far, volume that's six times the amount typically seen at this point. New positions are opening at the top eight positions, led by the weekly 8/25 220-strike put.

This denotes a shift in the options pits. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Boeing stock's 50-day call/put volume ratio of 2.67 ranks higher than 90% of readings from the past 12 months. 

Plus, now looks like a good time to weigh in with options. The stock is seeing attractively priced premiums at the moment, per BA's Schaeffer's Volatility Index (SVI) of 25%, which sits in the low 7th percentile of its annual range.

 

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