Why BlackBerry Stock Popped Today
Shares of BlackBerry Limited (NYSE: BB) -- the one-time smartphone maker, now security software specialist -- climbed steadily throughout the trading day Friday, ultimately ending with a 10.8% gain by the closing bell.
There doesn't appear to be any obvious news behind the stock's rally today, except for one thing: According to data from TheFly.com, options activity was unusually bullish in BlackBerry trading today, with 20% more call options being purchased than usual. This is a bullish signal because the buying of "calls" permits a contract buyer to force a contract seller to sell the stock at a certain price up to a set time in the future.
Options traders buy calls, of course, when they expect a stock to go up -- the idea being to gain the right to purchase shares at a price below where the stock's market price ends up. In the case of BlackBerry, the ratio of calls to puts (options that confer the right to sell the stock at a set price -- a bearish bet) trading today was 10-to-1 -- and that seems very bullish indeed, or at least shows great optimism on the part of options traders.
Source Fool.com