Most Active Options Update: General Motors Company and Ford Motor Company

Put buyers have been betting on General Motors Company (NYSE:GM) and Ford Motor Company (NYSE:F) lately

by Alex Eppstein

Published on Sep 17, 2015 at 2:14 PM

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. Two names of notable interest are automotive rivals General Motors Company (NYSE:GM) and Ford Motor Company (NYSE:F).

150917maou

​GM is up 0.5% today at $31.36, after the company agreed to pay a $900 million penalty as part of a settlement with federal authorities, related to last year's deadly ignition switch problem. Longer term, though, the shares are down more than 10% year-to-date, and face potential resistance at the $32 level -- which capped the stock's gains in July and August, and is home to its descending 80-day moving average.

Potentially reinforcing this technical resistance is the fact that peak front-month call open interest is located at the September 32 strike, home to nearly 45,000 contracts. According to data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), roughly 21,000 contracts have been bought to open here since mid-June. As the hedges related to these bullish bets unwind ahead of tomorrow night's expiration, GM could get stopped in its tracks.

Speaking more broadly, however, traders have blazed a bearish path toward the equity. General Motors Company's 10-day ISE/CBOE/PHLX put/call volume ratio sits at an annual high of 1.26. Elsewhere, based on the optimism witnessed among brokerage firms -- 58% of which consider the stock a "buy" or better -- GM remains vulnerable to future downgrades.

Fellow automaker F has also struggled on the charts, losing nearly 6% year-to-date at $14.61, and seeing recent advances capped by its 80-day trendline. Since their most recent high at $16.74 in late March, the shares have surrendered 12.7%.

As such, option traders have been boarding F's bearish bandwagon at an accelerated clip. Specifically, the stock's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.77 registers 1 percentage point shy of a 12-month peak. Along the same lines, the security's Schaeffer's put/call open interest ratio (SOIR) of 1.01 sits above 82% of comparable readings from the last year, hinting at a strong put-bias among short-term speculators.

Likewise, the brokerage crowd lacks confidence in Ford Motor Company. Just five of 14 analysts rate the shares a "buy" or better. However, the stock's consensus 12-month price target of $17.41 is located in annual-high territory, potentially leaving F vulnerable to price-target cuts.

A Schaeffer's exclusive

TOP STOCK PICKS 2020

Access your FREE insider report before it's too late!


 
 

Partnercenter


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


IRA/401k: The Crash-Proof Retirement Plan
Use gold to protect any IRA, 401(k), or retirement account from a looming financial crisis.
Stocks Eye Notable Weekly Gains on 3-Day Surge
Stocks are eyeing big weekly gains
WW Stock Brushes Off Bull Note
Morgan Stanley upgraded the Weight Watchers parent to "overweight" from "equal weight"
IRA/401k: The Crash-Proof Retirement Plan
Use gold to protect any IRA, 401(k), or retirement account from a looming financial crisis.