Put Buyers Descend On Ford Motor Company (F)

Ford Motor Company reported a year-over-year decline in November auto sales


Published on Dec 2, 2014 at 10:29 AM
Updated on Apr 20, 2015 at 5:32 PM

Ford Motor Company (NYSE:F) puts were in high demand yesterday, crossing the tape at twice the usual daily rate. What's more, traders honed in on short-term strikes, per the stock's 30-day at-the-money implied volatility, which spiked 7.6% to 22.5%.

That said, among F's most active options on Monday were the December 13.50 and 14 puts, where a collective 19,604 contracts were swapped -- the majority at the ask price, pointing to buyer-driven activity. Additionally, open interest rose overnight more at these strikes than any others, suggesting freshly initiated bets -- a theory echoed by data from the International Securities Exchange (ISE).

More broadly speaking, sentiment on F has generally been positive among options traders in recent months. The equity's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 6.04 ranks in the 93rd percentile of its annual range.

This is somewhat surprising, given Ford Motor Company's (NYSE:F) technical track record. The shares are up 4 cents this morning at $15.81, but have shed 4.5% in the last 12 months. Also troubling is this morning's news that the automaker's November sales fell 1.8% year-over-year -- though the company said the decline was expected. Regardless, if F continues to struggle technically, a capitulation among bullish options bettors could result in headwinds.

A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earning announcements before it's too late!



NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories

The Nevada Discovery That Could Jeopardize Chinese Dominance
Click to continue to advertiser's site.
UNH Stock Pops on Accelerated Payment Promise
Analysts are very bullish on UnitedHealth stock
Extra Space Storage Stock Wavers After Downgrade
Raymond James downgraded to "underperform" from "market perform"
The Top Lithium Play of 2020
Click to continue to advertiser's site.