Boeing CEO Dennis Muilenburg is testifying before Congress Tuesday. The stock has been suffering, although options traders think the CEO's remarks might lead to a relief rally
weekly 350-strike calls. About 3,000 of those traded hands for an average price of $1.60.
"Buyers of those calls are hoping the stock gets a bounce above $350 by at least the $1.60 that they paid after we see the CEO testify," Khouw said. This isn't exactly a high-conviction bet, though, and reads more like cautious optimism than genuine hopes for a serious turnaround in the stock. "Take a look at how much [these traders] are paying. $1.60, that's a small fraction of the current stock price, and it's very short in terms of how long these calls go in terms of expiration," said Khouw.
Indeed, these call contracts cost only 0.5% of the current stock price, and since they expire Friday, it doesn't look like these traders are willing to bet on this bounce lasting too long.
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