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Most Active Options Update: Ford Motor Company (F)

Ford Motor Company (F) option bulls continue to keep the faith

by 3/21/2014 2:22 PM
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The 20 stocks listed in the table below have attracted the highest total options volume during the past 10 trading days. Names highlighted are new to the list since the last time the study was run, and data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. One equity seeing call buying activity today is automaker Ford Motor Company (NYSE:F).


F has been a favorite among bullish speculators during the last 10 weeks, as nearly four calls have been bought to open on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) for every put. The resulting 50-day call/put volume ratio of 3.84 is higher than 82% of other readings captured during the last 12 months. In a similar vein, the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.56 ranks lower than 72% of the past year's worth of readings, suggesting the short-term options crowd is more call-focused than usual.

This trend has continued into today's session, as Ford Motor call volume is running at a 63% mark-up to typical intraday levels, with 61,000 contracts on the tape. Most active is the weekly 4/4 16-strike call, where more than 21,500 contracts have traded on open interest of fewer than 2,500. The large majority of this volume has traded at the ask price, and implied volatility has ticked more than 2 percentage points higher, collectively suggesting that these contracts are being purchased to open as a wager that Ford will gain ground over the next two weeks until these contracts expire.

Given that Ford is trading at $15.55 -- and hasn't closed above $16 since Jan. 23 -- this is a fairly speculative play. Delta for this out-of-the-money call stands at 0.25, suggesting a 1-in-4 chance the option will be in the money when it expires two weeks from today. If Ford doesn't manage to stage a rally during this time, the call buyers have risked only the premium paid, or the modest volume-weighted average price of $0.09.

On the charts, the stock was rebuffed earlier today by its descending 80-day moving average, which has rejected several advance attempts from Ford Motor Company (NYSE:F) shares over the last four months. In fact, the equity has managed just two daily closes north of this trendline in 2014.


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