Call Options Or Put Options On BlackBerry (BBRY)?

| December 17, 2014 | 0 Comments

blackberryFormer smartphone pioneer, BlackBerry (BBRY), is attempting to shake up the industry. The company is trying to win back customers with a new phone.

BBRY shares are currently trading at $9.87, up 28% year-to-date. The stock is trading 21% below the 52-week high of $12.54 and is 64% above the 52-week low of $6.01.

Is this an opportunity to buy call options on BBRY because of the company’s new phone? Or should you buy put options on BBRY because it’s too little too late? 

The bulls make a convincing argument…

BBRY, once the dominant player in mobile phones, is trying to make itself relevant once again. This time, the company is returning to its roots with the BlackBerry Classic.

The new phone will be an updated version of the type of phone which originally made the company popular. That is, it will have a QWERTY keyboard, which many business users prefer over touchscreens.

So far the reception has been highly positive, with pre-orders selling out in some regions. Can the company win back business users, and even move into the retail market? Only time will tell.

But the bears have a compelling case as well… 

BBRY has less than 1% of the global smartphone market. That’s not a misprint. Once the industry leader, BBRY phones are almost an afterthought these days.

How does a company make up that much ground? After all, it’s not like iOS and Android phones can’t be used for businesses. More and more apps are being developed for business users, but are designed only for the two dominant operating systems.

What’s more, the user base interested in physical keyboards is quite small. Are there really going to be enough Classic users to revitalize an entire company?

So is it time to be bullish on BBRY due to the new phone launch or do you take a bearish position because there’s just too much competition in the space?

If you think the bulls are right, take a look at buying the BBRY February 20th 10 calls for around $1.00. 

If you think the bears are right, take a look at buying the BBRY February 20th 10 puts for around $1.10.  

Yours in Profit,

Gordon Lewis

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Category: Call Or Put Options?

About the Author ()

Gordon Lewis is the Chief Investment Strategist and editor for the popular daily newsletter – Options Trading Research. He’s also editor of our dynamic theme-based options trading service, Advanced Options Adviser, and one of the key analysts behind the highly successful Options Trading Wire.