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Ford Motor Company (NYSE:F) this morning reported a 5% drop in January retail sales, and a 7% decline in domestic auto sales, citing inclement weather as the key factor impacting the results. As a result, F is down 2.1% to $14.64, marking a new six-month low. There are likely a few option traders shaking their heads; ahead of the sales release, speculators were scooping up calls at a faster-than-usual clip.
On Friday, the stock saw roughly 104,000 calls change hands -- a 31% mark-up to its average daily call volume, and nearly three times the number of F puts exchanged. Most active was the February 15 call, where more than 18,000 contracts traded -- mostly at the ask price, suggesting they were bought. Plus, open interest at the strike soared over the weekend, and the International Securities Exchange (ISE) confirms buy-to-open activity. By purchasing the calls to open, the buyers are hoping F muscles back atop the $15 level before the options expire at the close on Friday, Feb. 21.
Despite underperforming the broader S&P 500 Index (SPX) by more than 13 percentage points in the last 60 sessions, Ford Motor Company (NYSE:F) continues to attract option bulls. The stock's Schaeffer's put/call open interest ratio (SOIR) of 0.44 stands just 1 percentage point from an annual low, and speculators on the ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open F calls over puts at an accelerated pace during the past two weeks. An unwinding of optimism in the options pits could translate into contrarian headwinds for F.