Options Corner: Boeing's (BA) Example Trade

Core Viewpoint - Boeing is experiencing a significant turnaround compared to previous years, with a shift from negative headlines to more positive news, indicating a potential recovery in its stock performance [1][2]. Performance Analysis - Boeing is outperforming the S&P 500, its industrial sector (XLI), and the aerospace and defense ETF (Jets), although it is positioned in the middle compared to major competitors like GE, Rathon, General Dynamics, and Northrup Grumman [2][3]. - The stock has been trending downward after reaching highs near $243, establishing a trading range between $210 and $225, and currently holding between $188 and $195 as a potential support area [3][4]. Technical Indicators - The Relative Strength Index (RSI) remains low but above the oversold threshold, indicating some potential for upward movement [4]. - Key moving averages suggest that the 5-period EMA around $195 could act as a short-term resistance point, while the 21 and 25-day exponential moving averages converge around $201 [5]. Volume and Support Levels - Volume analysis indicates two significant nodes around $175 and $205, which may serve as additional support and resistance levels as the stock progresses [6]. Trading Strategy - A cash-secured put strategy is considered, particularly around the $191-$192 support level, with the stock expected to open around $195 due to positive news from the Dubai Air Show and production increases [7][8]. - A short put vertical strategy is proposed, selling a $190 put while buying a $170 put to mitigate risk, allowing for a credit collection of approximately $275 per spread, with a break-even point at $187.25, providing a cushion of about 4% below the current share price [10][12][13].