Following a positive post-earnings reaction in late September, tech name Blackberry (BB) reclaimed the 50% year-to-date level, after trading sideways below that area since July, notes options specialist Bernie Schaeffer in his trading newsletter, Option Advisor.
Earlier this month, BlackBerry announced the expansion of a collaborative effort with Visteon (VC) to accelerate the deployment of digital cockpit solutions for automakers and suppliers around the world. What this means is that BB will continue to be a player in the semiconductor and tech fields going forward.
The brokerage bunch is firmly in the bearish camp, with all six analysts in question calling the equity a "hold" or worse. This leaves plenty of room for upgrades going forward.
What’s more, Blackberry stock sports affordable premiums, as indicated by its Schaeffer's Volatility Index (SVI) of 76%, which stands in the 7th percentile of readings from the past year.
It's also worth noting the security has exceeded options traders' volatility expectations in the past 12 months, per BB’s Schaeffer's Volatility Scorecard (SVS), which sits at 85 out of a possible 100.
RECOMMENDATION: Buy the January 21, 2022, 11-strike call in our Aggressive portfolio.
A nice complement to our call recommendation, implied volatility could give investors the opportunity to sell rich premiums on Blackberry.
The 10-strike put has been generally supportive since July, while the 200-day moving average sits just above the $10 area, which is half of BB’s June intraday high of $20, and therefore could also act as another area of support.
The options pits are already bearish. This is per Blackberry stock's Schaeffer's put/call open interest ratio (SOIR), which sits in the 75th percentile of readings in its annual range. In simpler terms, short-term options traders have rarely been more put-biased in the past year.
RECOMMENDATION: Sell the November 19, 2021, 10-strike put in our Put Selling portfolio.