Ford Motor Company (F) and the $1.5 Million Bullish Bet

Ford Motor Company call open interest is at a multi-year peak

Nov 13, 2014 at 9:40 AM
facebook X logo linkedin

Ford Motor Company (NYSE:F) option traders have been initiating long calls over puts at fever-pitch in recent weeks. In fact, the stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 20.90 ranks higher than all other comparable readings taken in the past year.

It was a trend witnessed yesterday, where calls traded at two times the average daily rate, and outpaced puts by a more than 6-to-1 ratio. What's more, based on overnight open interest translations, F's call open interest is now resting at a multi-year peak.

Drilling down on Wednesday's action, F's January 2015 15-strike call was most popular by a mile, with 55,442 contracts on the tape by the close. The majority of the activity occurred when a massive block of 39,128 contracts was bought to open for $0.39 apiece, resulting in an initial net debit of roughly $1.5 million (number of contracts * premium paid * 100 shares per contract).

This is the most the speculator stands to lose, should F settle south of the strike price at the close on Friday, Jan. 16 -- when the options expire. Gains, meanwhile, are theoretically unlimited on a move north. At last night's close, delta on the call was docked at 0.41, suggesting a roughly 2-in-5 chance the option will be in the money at expiration.

While F's longer-term trajectory has done little to warrant such optimism -- the stock is down 12.6% year-over-year -- the equity has been making an attempt at technical redemption in recent weeks. Since hitting an annual low of $13.26 in mid-October, the shares have rallied nearly 13% to their current perch at $14.93. Ford Motor Company (NYSE:F) is extending this momentum in today's session, after reporting an 8.1% boost in European sales last month -- its fifth consecutive month of gains across the pond.


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI