Unusual Options Activity: Boeing (BA)

Shares of airline manufacturer Boeing (BA) have been gradually trending down over the past year. However, one trader sees the possibility for a strong rebound in shares in the next few weeks.

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  • That’s based on the March 4 $250 calls. With just under 40 days until expiration, 4,707 contracts traded compared to a prior interest of 138, for a 34-fold jump in volume. The buyer of the calls paid $1.26 to make the trade.

    Shares of the company last went for about $205, down over 23 percent from a 52-week high of $278. A rebound of 22 percent to $250 is certainly possible in the next few weeks, particularly if the overall stock market heads higher.

    Action to take: The poor performance in shares over the past year could point to a rebound, particularly if economic indicators related to travel improve in the coming weeks. That makes shares an attractive buy here, especially with the market likely to rebound from its recent sharp selloff in that timeframe.

    Traders may like the calls, which are an inexpensive enough trade to offer the potentially for triple-digit returns if shares have a strong rebound in the next few weeks. However, if shares don’t move high enough for fast enough, the option could end up expiring worthless, so traders will want to be nimble.

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    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.

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