Airplane manufacturer Boeing (BA) lost 32% in 2024, following a struggling attempt to turn around. One trader sees a continued downtrend in the coming weeks.
That’s based on the January 31 $150 puts. With 29 days until expiration, 4,040 contracts traded compared to a prior open interest of 107, for a 38-fold rise in volume on the trade. The buyer of the puts paid $0.89 to make the bearish bet.
Boeing shares recently traded for about $178, meaning the stock would need to drop by $38, or over 15%, for the option to move in-the-money. The $150 strike price is still well over the stock’s 52-week low of $137.03.
Although Boeing has had fewer scandals over the past 12 months than in past years, shares still take a hit on the news of any crash of Boeing craft. Revenues are near stabilizing, however, and while Boeing is still losing money, they are close to turning back to a profit.
Action to take: Investors may want to let Boeing shares pull back over the past few weeks, then start to buy after the next uptrend. Airplane manufacturing is a global oligopoly, and Boeing still remains a key player.
For traders, the January 31 $150 puts play well to a short-term weakness in shares, and if there’s a big selloff in the stock, the options are poised for massive gains. Given their low price, traders can likely earn high double-digit returns.
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 company mentioned in this article.