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Most Active Options Update: Ford Motor Company (F)

F is seeing notable options trading activity today

by 7/31/2013 2:05 PM
Stocks quoted in this article:

The 20 stocks below have attracted the highest options volume -- in the front three-months' series -- during the past 10 trading days. The companies highlighted are those that are new to the list since the last time the study was run. Data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. Three names of notable interest this afternoon are Ford Motor Company (NYSE:F), Citigroup Inc (NYSE:C), and Micron Technology, Inc. (NASDAQ:MU).

Like sector peer Bank of America Corp (NYSE:BAC), C is trading higher today, prompting option traders to pick up the weekly 8/2 52-strike call. Nearly 4,000 contracts have crossed the tape at this strike, mostly at the ask price. Elsewhere, spread strategists are targeting MU's weekly 8/9 and October call series, as the stock enjoys another day in the green. At last check, MU was up 4.4% on no apparent news, bringing its year-to-date advance to a brow-raising 107.5%. Meanwhile, here is a quick look at today's interesting activity in F's options pits.

Most

Detroit darling Ford Motor Company (NYSE:F) has been chugging its way up the charts for some time now, as evidenced by the stock's impressive 84.4% year-over-year gain. The equity is maintaining this momentum today, with F 0.4% higher to trade at $17.04. The continued rise has one group of option players exercising some caution against the possibility of a near-term pullback. North of 5,000 weekly 8/2 16.50-strike puts have changed hands throughout the session, all of which have done so on the ask side. Implied volatility has surged 10.5 percentage points, and volume is outstripping open interest, making it safe to assume that at least some of these positions are being bought to open. By purchasing the out-of-the-money puts, traders need Ford to land below breakeven at $16.47 (strike less the volume-weighted average price of $0.03) before the market closes on Friday. Should the stock fail to breach the strike price, the most the traders have risked is the modest premium paid.

Given F's solid showing on the charts, option traders have preferred calls over puts in recent weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators have bought to open 134,732 calls during the past 10 sessions, compared to 31,931 puts. The resultant call/put volume ratio of 4.22 ranks higher than 74% of similar readings taken in the past year, pointing to a healthier-than-usual amount of optimism in F's options pits. In light of this withstanding trend, today's put activity could simply represent shareholders picking up some options-related insurance ahead of tomorrow morning's release of the company's July sales report.


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