Most Active Options Update: Ford Motor Company (F)

Ford Motor Company sees a rare uptick in pre-earnings call volume

Oct 17, 2014 at 1:28 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 name of notable interest today is automaker Ford Motor Company (NYSE:F), as one pre-earnings options trader bucks the withstanding bearish trend.

Most Active Options Table

Ford Motor Company has sold off sharply since hitting a three-year high of $18.12 in late July, with the shares off nearly 22% to trade at $14.17. The stock has been making an attempt at technical redemption in recent sessions, and today, F is up 1.4% following an encouraging report on European auto sales. Amid this bounce, calls are trading at 1.4 times the average intraday pace, with one speculator in particular eyeing an extended rebound over the next two weeks -- a time frame that captures F's next quarterly earnings report.

Specifically, F's weekly 10/31 14.50-strike call has seen the most action today, with 18,396 contracts on the tape. The majority of this activity occurred when a massive multi-exchange sweep of 17,310 contracts was bought to open for $0.21 apiece, resulting in an initial cash outlay of $363,510 (number of contracts * premium paid * 100 shares per contract).

This is also the most the trader has to lose, if F remains south of $14.50 through the close on Friday, Oct. 31 -- when the weekly series expires. Gains, meanwhile, are theoretically unlimited, should the stock rally past breakeven at $14.71 (strike plus premium paid) over the next two weeks.

As touched upon, Ford Motor Company (NYSE:F) will take its turn in the earnings confessional ahead of the open next Friday, Oct. 24. Events such as these can often spark accelerated price action in a stock, and today's option bull appears to be hoping for a post-earnings move to the upside. The withstanding trend in F's options pits has tended toward the skeptical side, though. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for example, the equity's 10-day put/call volume ratio of 0.36 ranks in the bearishly skewed 86th percentile of its annual range.


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