Call Options Or Put Options On Blackberry (BBRY)?

| November 19, 2014 | 0 Comments

blackberrySmartphone maker Blackberry (BBRY) is an interesting battleground stock. Will the company ever return to its former glory?

BBRY shares are currently trading at $10.17, up 45% on the year. The stock is trading 19% below the 52-week high of $12.54 and is 87% above the 52-week low of $5.44.

Is this an opportunity to buy call options on BBRY because of the company’s new strategic direction? Or should you buy put options on BBRY because there’s just too much competition? 

The bulls make a convincing argument…

BBRY was once the king of smartphones, so management knows what it takes to be successful. Now the company has shifted direction to a software and services oriented strategy.

The hardware space is highly competitive, but by focusing on the software side, BBRY may have found a worthwhile niche. The company’s new platform will allow corporations and government agencies to manage and secure their mobile devices.

BBRY has even signed a deal with Samsung to use its security platform with Samsung’s own software. As big as Samsung is in the space, it’s a big deal.

But the bears have a compelling case as well… 

While BBRY was once a powerhouse in smartphones, the title belongs now to Apple (AAPL) and Samsung. Both of the industry leaders are giants.

How can Blackberry compete with the resources and widespread adoption of iOS and Android phones? Tough to say.   It will take a massive amount of corporate buy-in to make the company’s new products successful.

Not to mention, management has very ambitious goals for their new products… perhaps too ambitious. The company may be overly optimistic based on past success.

So is it time to be bullish on BBRY due to the new strategy or do you take a bearish position because the competition is just too much?

If you think the bulls are right, take a look at buying the BBRY January 17th 11 calls for around $0.70. 

If you think the bears are right, take a look at buying the BBRY January 17th 10 puts for around $0.80.  

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.