Options Traders See Higher Altitudes Ahead For Boeing's Stock

Reuters released a report on May 21 stating Boeing Co BA plans to increase production of its 737 MAX Planes to 31 per month by March and 42 per month by fall 2022.

Following the report, Morgan Stanley issued a statement that noted, “We do not expect Boeing to increase 737 Max production rates” before it receives recertification for its planes from China.

That same day, Citigroup maintained its neutral rating on Boeing, but increased its price target to $240.

Over the last four trading days, shares of Boeing have risen 7% due to the recognition of a bullish double bottom pattern created on May 19 at the $219 level.

On Monday, Boeing was printing a bullish green hammer candlestick indicating shares may trade up even higher over the next days and weeks.

Some Boeing options traders agree and bet over $3.5 million shares of the company are set to soar.

The Boeing Option Trades: Below is a look at the notable options alerts, courtesy of Benzinga Pro:

• At 9:38 a.m., Monday a trader executed a call sweep, near the ask, of 200 Boeing options with a strike price of $232.50 expiring on May 28. The trade represented a $92,200 bullish bet for which the trader paid $4.61 per option contract.
• At 10:06 a.m., a trader executed a call sweep, at the ask, of 200 Boeing options with a strike price of $227.50 expiring on May 28. The trade represented a $180,000 bullish bet for which the trader paid $9 per option contract.
• At 10:17 a.m., a trader executed a call sweep, near the ask, of 200 Boeing options with a strike price of $227.50 expiring on May 28. The trade represented a $180,000 bullish bet for which the trader paid $9 per option contract.
• At 10:32 a.m., a trader executed a call sweep, near the ask, of 300 Boeing options with a strike price of $265 expiring on Jan. 20, 2023. The trade represented a $919,500 bullish bet for which the trader paid $30.65 per option contract.
• At 10:37 a.m., a trader executed a call sweep, near the ask, of 200 Boeing options with a strike price of $227.50 expiring on May 28. The trade represented a $180,000 bullish bet for which the trader paid $9 per option contract.
• At 12:42 p.m., a trader executed a call sweep, near the ask, of 252 Boeing options with a strike price of $240 expiring on June 18. The trade represented a $166,320 bullish bet for which the trader paid $6.60 per option contract.
• At 12:56 p.m., a trader executed a call sweep, near the ask, of 450 Boeing options with a strike price of $220 expiring on June 17, 2022. The trade represented a $1.926 million bullish bet for which the trader paid $42.80 per option contract.
• At 2:27 p.m., a trader executed a call sweep, near the ask, of 200 Boeing options with a strike price of $240 expiring on May 28. The trade represented a $44,400 bullish bet for which the trader paid $2.22 per option contract.

Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price. A sweeper pays the market price for the call option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.

These types of call option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.

BA Price Action: Shares of Boeing closed up 1.13% to $237.44 on Monday.

(Photo: Boeing)