Option Bulls Flock to BlackBerry Ltd (BBRY) Amid M&A Chatter

Short-term traders think BlackBerry Ltd will re-take the $11 level

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Published on Oct 20, 2014 at 10:43 AM
Updated on Apr 20, 2015 at 5:09 PM

BlackBerry Ltd (NASDAQ:BBRY) has tacked on 3.5% to trade at $9.82, amid rumors of a potential Lenovo buyout. These developments have activity running hot in the stock's options pits -- especially on the call side, where intraday volume more than doubles what's expected at this point in the session.

Short-term contracts are in demand, as conveyed by BBRY's 30-day at-the-money implied volatility, which is 7.7% up at 54.2%. Accordingly, the equity's November 11 call is being traded most heavily, with 5,823 contracts on the tape so far. Volume outstrips open interest, and 79% of the contracts have crossed on the ask side, collectively hinting at newly bought bullish bets.

Long story short, the traders anticipate BlackBerry Ltd (NASDAQ:BBRY) will topple $11 by the close on Friday, Nov. 21, when the newly front-month options expire. Looking back, the shares were north of this level as recently as Sept. 22. From a longer-term perspective, BBRY has tacked on about 32% in 2014, easily outperforming the broader market.


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