Options Traders, Analysts Blast BlackBerry Stock After Earnings

Options volume is running at three times the intraday average

Deputy Editor
Sep 28, 2022 at 12:55 PM
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BlackBerry Ltd (NYSE:BB) stepped into the earnings confessional last night, where the communications concern reported fiscal second-quarter losses and revenue that were better than Wall Street anticipated. However, BB was still last seen 3.4% lower to trade at $146.57, after the company offered a weak current-quarter outlook following a fall in cybersecurity revenue.

Options activity is ramping up in response. At the session's halfway point, around 14,000 calls and 6,131 puts have been exchanged so far, which is triple the intraday average volume. Most popular by far is the weekly 9/30 5.50-strike call, followed by the 4.50-strike put in the same series.

It's also worth pointing out that BB ranks low on the Schaeffer's Volatility Scorecard (SVS), with a score of just 7 out of 100. In other words, the security has consistently realized lower volatility than its options have priced in, making the stock a potential premium-selling candidate.

Additionally, BlackBerry stock was hit with no less than four price-target cuts. CIBC slashed its price target to $4.50 from $5, TD Securities lowered its objective to $4.75. Sentiment wa already bearish coming into today, with three covering brokerages at a "hold," and three at a "sell" or worse. 

Today's negative price action was saved by the $4.80 level, but BlackBerry stock continues to underperform the broader market, The equity is off by more than 45% both year-to-date and year-over-year, and its mid-August rally was cut short by it 200-day moving average.

BB Chart September 282022

 

 

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