Credit: Shutterstock photoBlackBerry has been fighting back from a big selloff, and traders expect a rally to ensue.
optionMONSTER's Heat Seeker monitoring program detected the purchase of almost 27,000 April 9 calls in volume far above the previous open interest of 7,484 contracts, indicating new positioning. Most of the large blocks priced for $0.85 to $1.03.
These long calls lock in the price where shares can be purchased, offering the potential for upside leverage in the once-mighty mobile-phone stock. This way, the buyers know they won't miss a rally while limiting the amount of capital at risk if shares decline. (See our Education section)
BBRY rose 3.8 percent to $9.55 yesterday. It hit a 10-year low of $5.44 in December, rebounded to $10.80 in January, and has been consolidating since.
The shares have been trying to punch through their 200-day moving average during that time, and chart watchers may expect a rally if resistance is broken. Short interest also represents more than one-quarter of the float, which could also fuel buying in the name.
Total option volume in BBRY was double its daily average, with calls outnumbering puts by more than 5 to 1.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
