Skeptics Pounce as BlackBerry Limited (BBRY) Flirts with $10

BlackBerry Ltd (BBRY) is nearing double-digit territory

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Published on Apr 16, 2015 at 10:48 AM
Updated on Apr 20, 2015 at 5:32 PM

BlackBerry Ltd (NASDAQ:BBRY) is flirting with double-digit territory today, topping out at $10.04 and last seen 0.2% higher at $9.99. However, that isn't stopping one group of option bettors from wagering on future downside for the handset maker.

Currently, BBRY puts are crossing at more than double the usual intraday rate, and outstripping calls by a solid margin. Seeing the most activity by far is the in-the-money May 11 put, which is seeing buy-to-open activity according to the International Securities Exchange (ISE). Based on the volume-weighted average price (VWAP) of $1.18, the buyers are expecting the stock to tumble below $9.82 (strike less VWAP) by the close on Friday, May 15, when the soon-to-be front-month options expire.

Today's negativity toward BBRY is reflected throughout the Street. During the past two weeks on the ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity has amassed a put/call volume ratio of 0.83 -- in the 95th annual percentile.

In a similar vein, 19% of BBRY's float is sold short, which would take roughly seven sessions to buy back, at typical daily trading levels. If that's not enough, 16 of 19 analysts tracking the shares consider them a "hold" or worse.

However, BlackBerry Ltd (NASDAQ:BBRY) has been a long-term technical powerhouse, rocketing 40% over the last 12 months. Should this continue, a capitulation among skeptics could add fuel to BBRY's fire.


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