Blue Foundry (BLFY) Surges 39% on Merger News: Legal Scrutiny and Options Volatility Ignite Trading Frenzy

Summary
• Blue Foundry (BLFY) rockets 39.01% to $11.01, hitting a 52-week high of $11.249
• Merger with Fulton Financial at $11.67/share sparks regulatory and shareholder investigations
• Options volume surges 7.45% turnover as traders bet on near-term volatility
• RSI at 40.7 and MACD divergence hint at potential short-term bounce

Blue Foundry’s stock has erupted on news of its $243 million all-stock merger with Fulton Financial, sending shares 39% higher in a single session. The deal, valued at $11.67 per share, has triggered both shareholder optimism and legal scrutiny, with Halper Sadeh LLC investigating potential board fiduciary breaches. Traders are piling into options as technical indicators suggest a volatile near-term path, despite a bearish long-term trend.

Merger Terms and Legal Scrutiny Drive Sharp Rebound
Blue Foundry’s 39% intraday surge stems from the announced merger with Fulton Financial, which values BLFY at $11.67 per share—a 46% premium to its 52-week low of $7.61. However, the deal has ignited a legal investigation by Halper Sadeh LLC, questioning whether the board secured fair value for shareholders. This dual narrative—merger optimism vs. regulatory risk—has created a volatile trading environment. The stock’s sharp rebound from its intraday low of $10.27 to a high of $11.20 reflects both merger arbitrage speculation and short-term profit-taking by traders anticipating near-term volatility.

Options Volatility and ETF Positioning: Navigating the Merger Playbook
• 200-day MA: $9.14 (below current price), RSI: 40.7 (oversold), MACD: -0.239 (bearish), Bollinger Bands: $7.61–$8.69 (price above range)
• 30D Support: $8.59–$8.62, 200D Resistance: $9.29–$9.34

Blue Foundry’s technicals suggest a short-term bounce amid merger-driven optimism, but long-term bearish trends persist. The RSI at 40.7 indicates oversold conditions, while the MACD histogram (-0.015) and negative divergence hint at potential near-term exhaustion. Key levels to watch include the 200-day MA at $9.14 and the 52-week high of $11.249. The stock’s implied volatility (IV) of 57.89% for the December 19 put options suggests heightened uncertainty.

Top Options Picks:
• BLFY20251219P10 (Put, $10 strike, 2025-12-19):
- IV: 57.89% (high volatility), Delta: -0.2326 (moderate sensitivity), Theta: -0.0056 (slow time decay), Gamma: 0.1793 (high sensitivity to price moves), Turnover: $4,763 (liquid).
- This put option offers a 150% price change ratio, ideal for hedging against a potential pullback if merger sentiment weakens. A 5% upside scenario (to $11.56) would yield a payoff of $1.56 per contract.
• BLFY20251219C10 (Call, $10 strike, 2025-12-19):
- IV: 45.04% (moderate), Delta: 0.8158 (high sensitivity), Theta: -0.0189 (rapid time decay), Gamma: 0.2007 (high sensitivity), Turnover: $2,618 (liquid).
- With a 1,100% price change ratio, this call is a high-leverage play for aggressive bulls. A 5% upside to $11.56 would generate a $1.56 payoff, but its high delta makes it vulnerable to time erosion.

Trading Setup: Aggressive traders may consider a calendar spread using the December 19 $10 put and the January 16 $10 put to capitalize on IV expansion. For directional bets, the $10 call offers high leverage but requires rapid price action to offset theta decay. Watch for a break above $11.20 to validate the 52-week high as a catalyst for further gains.

Backtest Blue Foundry Stock Performance
I attempted to pull Blue Foundry Bancorp’s (BLFY) historical price series so I could automatically locate every session in which the share price jumped at least 39 % intraday and run the post-event performance test you requested. Unfortunately, the data-retrieval call returned an empty result, which means the upstream data source did not supply BLFY’s price history through the interface I am allowed to use.To move forward, we have two practical options:1. You can supply the event dates (or the raw price data) manually. • If you know the dates on which BLFY surged ≥ 39 % intraday between 2022-01-01 and today, I can feed those dates directly into the event-backtest engine and deliver the performance statistics. • Alternatively, if you have the daily OHLC file (or minute-level data) handy, you can share it and I will compute the event dates for you.2. We can try a different data source / symbol mapping. • Sometimes a vendor uses a slightly different code for the same stock (e.g., “BLFY.OQ” or “BLFY.NAS”). • If you can confirm an alternate symbol that works with your usual data feeds, I’ll attempt another pull.Please let me know which route you prefer, and we can proceed immediately.

Merger-Driven Volatility: Position for the Next 30 Days
Blue Foundry’s 39% surge is a textbook merger-driven rally, but legal scrutiny and technical bearishness create a high-risk, high-reward environment. Traders should monitor the December 19 options expiration for liquidity shifts and the $11.20 level as a critical psychological barrier. If the stock closes above $11.20, the 52-week high, it could trigger a wave of merger arbitrage buying. Conversely, a breakdown below $10.50 would validate the long-term bearish trend. For now, the BLFY20251219P10 put offers a balanced hedge, while the BLFY20251219C10 call suits aggressive bulls. Watch JPMorgan Chase (JPM), the sector leader, for broader banking sector cues—its -0.17% intraday move suggests caution in the sector.