$BA Options Intelligence

🎯 SELL BA NOV 21 230 PUT

I recommend selling the BA Nov 21 230 put because the current term structure shows very high implied volatility (IV) at 37.0% with an IV rank of 100%, indicating options premium is expensive and favorable for premium sellers. The short-dated Nov 21 expiration has a market IV of 34.6%, slightly above the 27.4% baseline historical volatility, supporting a premium selling strategy. Additionally, BA’s stock price is $194.88, well below the 230 strike, so this put is deep out-of-the-money (OTM), offering a high probability of expiring worthless. The recent positive news of large Boeing aircraft orders from Emirates and Ethiopian Airlines may support a stable or rising stock price, further reducing downside risk in the near term[1][9][11].

Sell BA Nov 21 230 Put
Stock Price: $194.88 | Entry: Bid price approx $0.05 (very low premium due to deep OTM, exact bid/ask not provided but volume shows high activity at this strike)

📊 Trade Metrics

• Max Profit: Premium collected (~$5 per contract if mid price is $0.05)
• Max Loss: $35.12 per share if BA closes below $0 at expiration (theoretically large but practically limited by stock price floor)
• Breakeven: Strike price minus premium received (~$229.95)
• Probability of Profit: Very high given the strike is far above current price
• Days to Expiration: 4 days (Nov 21)

📈 Term Structure & Volatility Analysis

• Baseline 90-day Vol: 27.4%
• 4-day Clean IV: 34.6% (above baseline, favoring selling premium)
• IV Rank: 100% (extremely high, strong sell premium signal)
• Expected Daily Move: ±$4.54 (2.33%)—far below the $35 gap to strike 230, indicating low risk of hitting that strike soon
• Earnings Multiplier: 4.0x (high expected earnings volatility, but this trade expires before earnings on Jan 27, avoiding earnings risk)

📈 Greeks & Volatility

• Delta: Very low (deep OTM put)
• Theta: Positive for seller (time decay benefit)
• Vega: Negative (benefits if IV contracts)
• Put/Call Volume Ratio: 1.80 (bearish sentiment), but high IV favors premium selling

🎯 Why This Trade

The term structure shows near-term options are overpriced relative to historical volatility, creating an edge for selling premium. The recent large aircraft orders from Emirates and Ethiopian Airlines announced today support Boeing’s commercial outlook and likely underpin stock price stability or upside[1][9][11]. The stock is trading at $194.88, well below the 230 strike put, making this a low-risk short put sale with a high probability of expiring worthless. The trade avoids the earnings event on Jan 27 by expiring Nov 21, reducing event risk. The expected daily move is much smaller than the gap to the strike, and technical indicators show the price below key moving averages but RSI near neutral (32.23), suggesting no immediate oversold bounce or crash. This aligns with a conservative premium selling approach.

📊 Pro Analysis

• Current IV: 37% vs Historical 8.9% (high volatility environment)
• IV Rank: 100% (favoring selling premium)
• Market Maker Max Pain: $215 (well below the 230 strike, but since strike is far OTM, risk is limited)
• Technical: Price below 200-day MA ($200.94), RSI neutral at 32.23 (no oversold panic)
• Sector: Positive commercial aircraft orders but competitive pressure from Airbus noted[3]

🔍 Earnings Date Check

Earnings on 2026-01-27, recommended expiration Nov 21 is well before earnings, avoiding earnings volatility risk.

💡 Trade Management

• Entry: Sell Nov 21 230 put at bid price (approx $0.05 or better)
• Target: Keep full premium if put expires worthless
• Stop: Consider closing if BA drops sharply below $210 to limit losses
• Time Stop: Close before expiration if stock approaches strike

📅 Economic Events

No major events before Nov 21 that affect BA directly.

🔒 Pricing Validation

• 230 Put intrinsic value: Max(0, 230 - 194.88) = $35.12 (deep ITM intrinsic if exercised, but put premium very low due to short time and low probability of exercise)
• Put-Call Parity and bid/ask spreads consistent with deep OTM puts trading low premium
• Spread pricing not applicable (single leg trade)

🔍 Market Overview

The market is pricing in high volatility for BA options, but recent Boeing commercial aircraft orders from Emirates (65 777X jets) and Ethiopian Airlines (11 737 MAX jets) announced today provide a positive fundamental catalyst supporting the stock price[1][9][11]. The stock trades below key moving averages, indicating a short-term bearish technical posture, but the large gap to the 230 strike and high IV make selling deep OTM puts a favorable risk/reward. The broader aerospace sector shows mixed signals with Airbus gaining some ground, but Boeing’s order backlog remains strong. The Fed’s current stance and upcoming economic events do not pose immediate risk to BA in the next 4 days.

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Confidence Level: Medium-High
The trade benefits from very high IV and a large cushion between current price and strike. However, the intrinsic value of the 230 strike put is large, so if BA unexpectedly gaps up sharply, losses could be limited but if it crashes, risk is high. Close monitoring is advised.

Risk Assessment: Limited by short time to expiration and low probability of exercise, but maximum loss is substantial if BA collapses below strike. Suitable for traders comfortable with defined risk on short-term premium sales with active management.

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If you want a defined-risk alternative, consider a vertical put credit spread like:
SELL BA NOV 21 230 PUT, BUY BA NOV 21 225 PUT
This limits max loss to $5 per share minus premium collected, but bid/ask data needed for precise pricing.

Current stock price: $194.88.