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BlackBerry Options Draw A Crowd As Shares Rise

Posted on the 13 August 2013 by Phil's Stock World @philstockworld

BBRY - BlackBerry Ltd. – Shares in BlackBerry are moving higher on Tuesday, extending Monday’s rally after the smartphone maker yesterday said it would explore strategic options, including a possible sale of the company. The stock popped nearly 13% to $12.18 in the early going, the highest level in six weeks. Options traders positioning for the price of the underlying to continue to climb snapped up weekly call options on BBRY straight out of the gate this morning. Trading traffic in the Aug 23 ’13 $9.5 and $12 strike calls suggests one strategist may be rolling up a bullish stance on BBRY, selling roughly 2,000 of the $9.5 calls for an average premium of $1.59 each, and buying roughly the same number of $12 calls at an average premium of $0.23 apiece within the first 20 minutes of the opening bell. Meanwhile, it looks like traders purchased more than 2,600 calls at the Aug 23 ’13 $11.5 strike for an average premium of $0.56 apiece, and around 400 calls at the Aug 23 ’13 $12 strike at a premium of $0.25 each. Buyers of the $12 calls stand ready to profit by expiration next week should shares in BlackBerry rally 3.8% over the current price of $11.80 to exceed the average breakeven price of $12.25. Not all of the trading traffic in BlackBerry options today looks for the price of the underlying to extend gains. Buyers of more than 3,200 of the Aug 23 ’13 $11 strike put options at an average premium of $0.43 per contract this morning are positioned to make money in the event that the smartphone maker’s shares drop 11% from the current price to settle below the breakeven point on the downside at $10.57 at expiration. Upwards of 204,000 options contracts have changed hands on BBRY as of 11:20 a.m. ET versus the stock’s average daily volume of around 75,000 contracts.


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