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