Market Overview

Carter Worth And Mike Khouw's Bearish Boeing Trade


On CNBC's Options Action, Carter Worth spoke about technical warning signs in Boeing Co (NYSE: BA). He thinks it's overbought, because it has significantly outperformed the market and the sector, which hasn't been the case in the past.

Worth added that the stock is also trading significantly above its 150-day moving average, which has happened only four times in its history. Every time it has been this high above the 150-day moving average, the stock pulled back. Worth thinks it's going to trade lower again and he would sell the stock.

Mike Khouw believes Boeing could have some fundamental problems, too. He explained that deliveries of Boeing 777 are going to slow down and there is also more competition in smaller airplanes segment.

To make a bearish bet, Khouw wants to sell the April 180/190 call spread for a total credit of $4.30. The trade starts to lose money above $184.30 or 1.16 percent above the current market price. If Boeing Co trades below $180 at the April expiration, Khouw is going to collect $4.30, which is his maximal profit.


Related Articles (BA)

View Comments and Join the Discussion!

Posted-In: Carter Worth CNBC Mike Khouw Options ActionOptions Markets Media