Most Active Options: Tesla Motors Inc (TSLA), Ford Motor Company, and General Motors Company

How option traders are betting on automakers Tesla Motors Inc, Ford Motor Company, and General Motors Company

by Andrea Kramer

Published on Dec 19, 2014 at 11:56 AM
Updated on Jun 24, 2020 at 10:16 AM

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. Among the stocks garnering attention lately are automakers Tesla Motors Inc (NASDAQ:TSLA), Ford Motor Company (NYSE:F), and General Motors Company (NYSE:GM). Let's dig deeper and see how TSLA, F, and GM are faring on the charts, and how traders are placing their bets.

Most Active Options Table

A day after flirting with seven-month lows south of $200, TSLA yesterday gapped 6% higher and back atop its 10-day moving average -- a feat not accomplished since mid-November. Today, the shares are catching their breath, down 0.2% at $217.82.

Although TSLA remains 44.6% higher in 2014, the stock has struggled of late, down 11% since the start of December. Against this backdrop, option players have been picking up TSLA puts over calls at an annual-high clip during the past two weeks, either to bet bearishly or to protect their Tesla Motors Inc shares from additional downside. The equity's 10-day put/call volume ratio on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits at a 52-week peak of 1.30.

F has also been a broad-market laggard, underperforming the S&P 500 Index (SPX) by about 13 percentage points during the past three months. From a longer-term perspective, F has given up 5.2% in December, and was last seen fractionally higher at $14.92.

Despite the security's speed bumps on the charts, traders have bought to open more than five Ford Motor Company calls for every put during the past 50 days on the ISE, CBOE, and PHLX. This ratio stands higher than two-thirds of all other readings from the past year, hinting at a healthier-than-usual appetite for bullish bets over bearish. Should F continue to struggle, or should the company report disappointing December sales in a couple of weeks, an unwinding of optimism in the options pits could exacerbate selling pressure on the automaker.

GM has fared the worst this year, surrendering 20.5% amid the ongoing recall saga. Stifling the stock's rebound attempts has been its 10-month moving average, which hasn't been conquered on a monthly closing basis since January.

As with fellow Detroit darling Ford, General Motors Company's proverbial dance card remains full. The equity's 50-day ISE/CBOE/PHLX call/put volume ratio of 2.90 is just 2 percentage points from an annual optimistic peak. Plus, more than half the analysts following the shares maintain "buy" or better opinions. A reversal in sentiment among options traders and/or a round of downgrades could weigh further on GM, which was last seen at $32.60.


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