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Most Active Options Update: Ford Motor Company (F)

Ford Motor Company traders roll the dice on end-of-week downside

by 6/9/2014 1:53 PM
Stocks quoted in this article:

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 name of notable interest among short-term traders this afternoon is Ford Motor Company (NYSE:F). Falling off the list since last time was Pfizer Inc. (NYSE:PFE).

Most

Amid its recent bout of technical turbulence, Ford Motor Company found a firm foothold atop its 320-day moving average. In fact, the stock's most recent bounce off this rising trendline in mid-May sent the shares soaring to a year-to-date closing high of $17.08 on Friday.

In the wake of notching this notable milestone, F has been waffling on both sides of breakeven throughout today's trading. Against this tepid price action, puts are trading at a 20% mark-up to the intraday average -- a rare occurrence in F's options pits -- and a number of speculators are betting on a quick retreat by week's end.

Specifically, the equity's weekly 6/13 17-strike put is the most active F option this afternoon. The majority of the 2,664 contracts traded here have gone off on the ask side, implied volatility is up 3.5 percentage points, and volume outstrips open interest. Summing it all up, it seems safe to assume new positions are being purchased.

In order for these traders to profit at expiration, Ford Motor Company (NYSE:F) must be sitting below $16.88 (strike less the volume-weighted average price of $0.12) at this Friday's close, with profit rising with each additional step south the stock takes. Losses, meanwhile, are limited to the initial cash outlay, should the security close north of $17 at week's end. At last check, the equity was seen lingering about a nickel north of the strike price, at $17.05.


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