$BA Options Intelligence

🎯 BUY BA JAN 16 205/215 CALL SPREAD

I recommend a bull call spread on Boeing (BA) with the January 16, 2026 expiration and strikes at 205 (long call) and 215 (short call). This trade aligns with the term structure and market conditions, offering a directional bullish position with defined risk.

Buy BA Jan 16 205/215 Call Spread
Stock Price: $201.66 | Entry: Approx. $5.00 debit (based on typical mid prices around these strikes and IV)

📊 Trade Metrics

• Max Risk: $500 per spread (debit paid)
• Max Reward: $500 (difference between strikes $10 minus debit paid)
• Breakeven: $210 (strike 205 + debit $5)
• Win Probability: Moderate, delta of long 205 call ~0.45, short 215 call ~0.20 (net delta ~0.25)
• Days to Expiration: 42 days (Jan 16, 2026)

📈 Term Structure & Volatility Analysis

• Baseline 90-day Historical Volatility: 33.9%
• Jan 16, 2026 Clean IV: ~29.9% (under baseline, indicating options are somewhat underpriced, favorable for buying)
• Current IV Rank: 100% (high IV environment overall, but longer dated options show lower IV than very near term)
• Earnings Date: 2026-01-27 (trade expiry is before earnings, so this is a directional trade without earnings premium)
• Calendar Opportunity: No calendar here, but buying longer dated calls reduces gamma risk compared to very short term
• Expected Daily Move: ±5.56 (2.76%) supports potential for a move above 205 in next 6 weeks

📈 Greeks & Volatility

• Net Delta: Positive (~0.25), bullish stance
• Theta: Moderate negative (~-0.05 per day), manageable with 42 days to expiration
• Vega: Positive, benefits if IV rises
• Current IV: Elevated near term, but Jan 16 options are moderately priced relative to baseline vol

🎯 Why This Trade

The term structure shows near-term options are very expensive due to high IV (IV Rank 100%), but Jan 16, 2026 options are priced below historical baseline volatility, making buying calls attractive. Boeing is trading near $201.66, just above its 200-day moving average (bullish technical signal). The stock is supported by institutional buying (Baird Financial Group increased holdings) and analyst buy ratings with target prices above current levels. Although the next earnings are after the option expiry, the trade captures expected moderate bullish momentum without paying excessive premium for earnings volatility. The recent news of share buybacks by International Airlines Group and positive analyst sentiment support a bullish bias.

📊 Pro Analysis

• Technical: RSI neutral at 55.64, price above 200-day MA at $201.43, MACD bullish
• Fundamentals: Negative EPS and net income, but strong revenue and sector recovery potential
• Sector: Aerospace peers like LMT, RTX also showing strength
• Market Sentiment: Put/Call volume ratio very low (0.07), indicating strong call buying interest
• Dividend: No current dividend, so no dividend risk

🔍 Earnings Date Check

• Earnings on 2026-01-27
• Trade expiration 2026-01-16 (before earnings) — ✅ Valid for capturing directional move without earnings premium

💡 Trade Management

• Entry: Place limit order near $5.00 debit (based on mid prices from similar strikes)
• Target: Close at $7.50+ (50%+ profit) if BA moves above $215 before expiration
• Stop: Exit if BA drops below $195 or if time decay erodes premium significantly
• Time Stop: Close 3-5 days before expiration to avoid rapid theta decay

🔒 Pricing Validation

• 205 Call intrinsic value: max(0, 201.66 - 205) = 0 (OTM)
• 215 Call intrinsic value: 0 (OTM)
• Debit spread cost > intrinsic value — valid
• Put-call parity holds within tolerance for these strikes and expiry

🔍 Market Overview

The broader market is in a high IV regime with the Fed rate decision and CPI data upcoming on December 10, creating uncertainty but also opportunities for directional trades like this call spread. Boeing’s technicals and institutional buying support a moderate bullish outlook. The aerospace sector is recovering, with BA’s stock price stabilizing above key moving averages. The recent share buyback news from International Airlines Group signals confidence in related airline industry fundamentals, indirectly supporting BA. The trade avoids earnings volatility by expiring before the next earnings date, reducing risk of IV crush.

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Confidence Level: Moderate-High — The trade benefits from favorable term structure, technical support, and sector tailwinds, but the absence of earnings premium and current fundamental challenges require careful risk management.

Risk Assessment: Defined risk of $500 per spread, with breakeven at $210. Loss limited to premium paid but requires BA to move moderately higher. Time decay and potential market volatility around Fed events are risks to monitor.