Unusual Options Activity: Boston Properties (BXP)

Shares of office real estate investment trust (REIT) Boston Properties (BXP) have generally been rising over the past few months. One trader sees a continued rally in shares.

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  • That’s based on the November $130 calls. With just over 4 months until expiration, 5,000 contracts traded against a prior open interest of 138, for a 36-fold rise in volume. The buyer of the calls paid about $2.20 for the trade.

    With shares around $117, they would need to rise $13, or about 11 percent to move in-the-money at the time of expiration. That’s a somewhat large move for a REIT in the timeframe, but a possible one.

    The office REIT still remains below its pre-pandemic high as return-to-work trends continue to slowly roll out. Boston Properties focuses on strong markets and Class-A real estate, so it will likely continue to hold its value.

    Action to take: Investors may like share here, as the stock yields about 3.4 percent right now. REITs typically pay out most of their income as dividends for tax purposes, so that amount may rise on a return to a more normal office environment.

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  • For traders, shares have been in an uptrend for most of the past year, but pulled back slightly in the past few weeks before starting to move higher again. That makes the calls attractive, as they could deliver high-double or even low-triple digit returns.

     

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