Put Buyers Descend On Ford Motor Company (F)

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

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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.


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