Options Traders Eye Further Upside For BlackBerry

BlackBerry Ltd BB was trending on r/WallStreetBets again. The company on Tuesday was granted an additional nine U.S. options to beef up the impressive portfolio of about 38,000 patents the company owns.

The company uses its wealth of patents for various reasons to increase revenue:

• Technology Development: BlackBerry develops some of its patents into useable software technology.
• Sales: The company sells its patents to tech giants. In January BlackBerry sold 90 patents relating to smartphone technology to Huawei.
• Revenue Through Legal Action: BlackBerry has taken numerous big tech companies to court over patent infringement allegations. In January the company reached a royalty settlement with Facebook Inc FB although the terms were not disclosed.

Options traders may believe BlackBerry has news of a development on the horizon or that another short squeeze attempt may be in the works and on Wednesday purchased over $374,357 worth of call contracts. One institution paid $116,352 for a single order of 606 bullish calls at $1.92 per piece although the trader chose a modest strike price of $10, which means they are already "in-the-money" and have less risk.

See Also: BlackBerry Stock Starts Curling Higher: What's Next?

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 market price for the call or put option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.

These types of 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.

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

• At 9:30 a.m., a trader executed a call sweep near the ask of 241 BlackBerry options with a strike price of $12 expiring on Oct. 15. The trade represented a $31,330 bullish bet for which the trader paid $1.30 per option contract.
• At 9:37 a.m., a trader executed a call sweep at the ask of 269 BlackBerry options with a strike price of $11 expiring on Sept. 17. The trade represented a $36,584 bullish bet for which the trader paid $1.36 per option contract.
• At 9:40 a.m., a trader executed a call sweep near the ask of 351 BlackBerry options with a strike price of $12 expiring on Sept. 17. The trade represented a $33,696 bullish bet for which the trader paid 96 cents per option contract.
• At 9:41 a.m., a trader executed a call sweep near the midpoint of 385 BlackBerry options with a strike price of $11.50 expiring on Sept. 3. The trade represented a $25,025 bullish bet for which the trader paid 65 cents per option contract.
• At 9:49 a.m., a trader executed a call sweep near the ask of 376 BlackBerry options with a strike price of $12 expiring on Sept. 17. The trade represented a $33,840 bullish bet for which the trader paid 90 cents per option contract.
• At 9:52 a.m., a trader executed a call sweep near the ask of 200 BlackBerry options with a strike price of $12.50 expiring on Jan. 21, 2022. The trade represented a $49,800 bullish bet for which the trader paid $2.49 per option contract.
• At 11:38 a.m., a trader executed a call sweep near the ask of 606 BlackBerry options with a strike price of $10 expiring on Sept. 17. The trade represented a $116,352 bullish bet for which the trader paid $1.92 per option contract.
• At 11:39 a.m., a trader executed a call sweep near the ask of 267 BlackBerry options with a strike price of $10 expiring on Sept. 17. The trade represented a $50,730 bullish bet for which the trader paid $1.90 per option contract.
• At 12:15 p.m., a trader executed a call sweep near the ask of 407 BlackBerry options with a strike price of $11 expiring on Nov. 19. The trade represented a $33,696 bullish bet for which the trader paid $2.27 per option contract.

BB Price Action: BlackBerry is trading up 2.9% to $11.74 at time of publication.