On Wednesday September 3rd on the Navivest blog, we recommended that traders buy the Boeing (BA) September 65 put options. The rational behind the trade was that one of Boeing’s unions which covers aircraft assembly employees, was set to vote on whether to accept or reject an employment contract that Boeing (BA) had offered the employees.

If the union rejects the contract, Boeing’s (BA) shares would see some pull back causing the put options to rise. We entered into the trade paying $1.30 for the put options. At the close of the stock market on Friday, those puts were quoted with a bid price of $3.10, a 138% gain.

When the union voted to reject the contract, the government got them to agree to postpone a strike for 48 hours while negotiations continued. Those negotiations failed Friday evening and the aircraft assembly workers are going on strike over the weekend. As a result, we should see further price decline in Boeing (BA) shares and should that happen, we will probably see another 100% rise minimum in the put options.

Subscribers to our Options Capitalist trade advisory are out of the trade, but readers of the blog should still be in it. These are September options, which expire on the 19th, plus the risks to Boeing (BA) are huge, so they may do what is necessary to bring an end to the strike ASAP which could send Boeing (BA) shares soaring. On that basis, we recommend that our readers be happy with a triple digit gain in a week, and exit the trade on Monday.

Tags: Boeing  Options trading

Boeing’s (BA) machinist unions, which is responsible for the company’s aircraft assembly employees, have gone on strike over the weekend, after emergency talks to stave of a strike following the union’s vote to reject an employment contract that Boeing (BA) offered, failed.

The strike, which could cause Boeing almost a hundred million dollars a day, will halt production on Boeing’s 737, 747, 767 and 777 planes. The strike will also cause further delays to the company’s 787 Dreamliner on which Boeing is banking on and possibly delay Boeing’s (BA) planned first test flight of the aircraft later this year.

Analysts are estimating that if the stike lasts a month it would cost Boeing (BA) $2.8 billion in sales and an EPS loss of $0.31.

Tag: Boeing strike

Yesterday, we recommended that readers of the Navivest blog buy the Boeing (BA) September 65 puts because a Boeing (BA) employees union was going to be voting on whether to accept a contract that Boeing (BA) had offered.

The union voted to reject the deal and the stock is dropping today, currently off $1.65 to $64.42. The September 65 puts which we entered into at $1.50 are now up about 26%.

We will be getting crude inventories report today at 11 AM. If those numbers are bullish for oil prices and stocks continue to drop on the day, we suggest those that missed on the Boeing September 65 puts options trade yesterday get in, as we could see further decline in Boeing tomorrow. However, those in the trade, need to be out by close of markets on Friday, as Boeing (BA) might come back with an offer that the union accepts.

Tags: Boeing