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Weekly Calls In Play On Boeing As Shares Soar To Record Highs

BA – Boeing Company – Trading in weekly call options on Boeing today suggests some traders are positioning for shares in the maker of the Dreamliner 787 to extend gains in the near term. Shares in BA, up roughly 75% since this time last year, increased 1.6% today to a fresh record high of $120.38.

More than 2,500 of the Sep 27 ’13 $119 strike call options changed hands during morning trading against zero open positions. It looks like most of the volume was purchased for an average premium of $1.72 each. Buyers of the $119 calls stand ready to profit should shares in Boeing rally above the average breakeven price of $120.72 by expiration next week. 

BBRY – BlackBerry Ltd. – Shares in the smartphone maker got off to a rocky start this morning, slipping 1.6% to $10.23 during the first thirty minutes of the session, but have since recovered to trade up 0.40% as of midday in New York.

Trading traffic in Oct 04 ’13 expiry put options today indicate at least one trader is bracing for the price of the underlying to dip sharply during the next few weeks. Around 3,000 of the Oct 04 ’13 $9.0 strike puts appear to have been purchased this morning for an average premium of $0.22 each. The bearish position makes money if shares in BlackBerry drop 14% from today’s low of $10.23 to trade below the breakeven point at $8.78 by expiration. 

RAD – Rite Aid Corp – Options volume on Rite Aid is roughly four times the stock’s average daily volume just one hour into the trading session, with approximately 45,000 contracts traded so far versus RAD’s average daily volume of around 12,300 contracts.

Trading in RAD calls is outpacing that of puts, with the call/put ratio up at 12.0 as of the time of this writing. Shares in Rite Aid increased as much as 17.25% to $4.35 in the early going, the highest since 2007, after the drugstore posted a surprise second-quarter profit of $0.03 a share, exceeding the average analyst forecast of a loss of $0.04 per share. 

Call volume is heaviest in the January 2014 expiry options. More than 25,000 call options changed hands at the Jan 17 ’14 $3.5 strike this morning, which is less than the 40,692 contracts in open interest at that strike. Meanwhile, around 12,000 calls traded at the Jan 17 ’14 $4.5 strike, approximately 8 times previously existing open interest of 1,548 contracts. Time and sales data suggests one strategist may have purchased the $4.5 strike calls at a premium of $0.40 each. The $4.5 calls may be profitable at expiration next year in the event that RAD shares rally 13% over the intraday high of $4.35 to exceed the breakeven price of $4.90. 


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