Boeing To Launch Starliner Capsule To Space, But These Options Traders See Dark Times Ahead

Boeing Co BA will become the latest company to launch a test flight into space when its CST-100 Starliner capsule blasts off to the International Space Station (ISS) on Friday.

Earlier this month, Virgin Galactic Holdings Inc SPCE and Blue Origin completed successful test flights with each company’s billionaire CEO onboard.

Boeing’s flight, which will be uncrewed, is its second attempt to reach the space station after a failed mission in 2019 the company attributed to a software issue. Friday’s flight will carry supplies and test equipment but Boeing plans to eventually use the capsule as a shuttle service for space station crew to and from the ISS.

The test flight, scheduled for 2:53 p.m. ET, is intended to demonstrate the Starliner can lift off from the Kennedy Space Centre at Cape Canaveral in Florida and dock at the ISS before re-entering Earth’s atmosphere and safely landing in the desert.

Options traders aren’t bullish the flight will raise Boeing’s stock, however, and prior to it, the company will need to survive Boeing’s earnings print on Wednesday.

See Also: Boeing Earnings Approach As Company Deals With New Snag Affecting 787 Planes

Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price. A sweeper pays market price for the call or put option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.

These types of option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.

The BA Trades: Below is a look at the notable options alerts, courtesy of Benzinga Pro:

• At 10:07 a.m., a trader executed a put sweep near the ask of 300 Boeing options with a strike price of $215 expiring on July 30. The trade represented a $37,800 bearish bet for which the trader paid $1.26 per option contract.
• At 10:13 a.m., a trader executed a put sweep near the ask of 216 Boeing options with a strike price of $235 expiring on Sept. 17. The trade represented a $389,664 bearish bet for which the trader paid $18.04 per option contract.
• At 11:42 a.m., a trader executed a put sweep near the ask of 328 Boeing options with a strike price of $200 expiring on Aug. 20. The trade represented a $61,992 bearish bet for which the trader paid $1.89 per option contract.
• At 12:05 p.m., a trader executed a put sweep near the ask of 200 Boeing options with a strike price of $220 expiring on July 30. The trade represented a $37,800 bearish bet for which the trader paid $3.60 per option contract.
• At 12:24 p.m., a trader executed a put sweep near the ask of 400 Boeing options with a strike price of $245 expiring on Aug. 20. The trade represented a $1.03 million bearish bet for which the trader paid $25.75 per option contract.
• At 2:20 p.m., a trader executed a put sweep near the ask of 200 Boeing options with a strike price of $220 expiring on Aug. 6. The trade represented a $96,000 bearish bet for which the trader paid $4.80 per option contract.
• At 2:31 p.m., a trader executed a put sweep near the ask of 200 Boeing options with a strike price of $217.50 expiring on July 30. The trade represented a $44,800 bearish bet for which the trader paid $2.24 per option contract.

BA Price Action: Shares of Boeing closed down 1.6% at $222.27.

Photo: The Boeing CST-100 Starliner spacecraft is guided into position above a United Launch Alliance Atlas V rocket at the Vertical Integration Facility at Space Launch Complex 41 at Florida’s Cape Canaveral Air Force Station in 2019.