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Ford Motor Company (F) Option Traders Up the Bearish Ante

Ford Motor Company (NYSE:F) speculators are using both calls and puts to bet bearishly

Mar 1, 2016 at 11:31 AM
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Shares of Ford Motor Company (NYSE:F) have jumped 4.2% today to $13.03, after the Detroit automaker reported a better-than-expected 20.4% rise in February auto sales -- thanks to a big boost from sales of SUVs and crossovers. The positive price action has speculative players flooding into the stock's options pits, although not everyone is convinced F can maintain this upward momentum.

Overall, option volume is running at three times what's typically seen at this point in the day. By the numbers, roughly 46,000 calls have changed hands, compared to 37,000 puts -- with volume on both sides nearing the top percentile of their respective annual ranges.

The most active front-month F option is the March 12 put, where it looks like some of the activity may be of the buy-to-open kind. If this is the case, speculative traders are banking on F retreating back below the $12 mark by the close on Friday, March 18 -- when front-month options expire.

Meanwhile, shorter-term call players are betting on the $13 level to serve as overhead resistance over the next two weeks. Specifically, it appears as if new positions are being sold to open at F's weekly 3/11 13-strike call, the stock's most active option overall.

Widening the sentiment scope reveals today's bearish bias is just par for the course among F options traders. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for instance, the stock's 10-day put/call volume ratio of 0.53 sits in the 71st annual percentile.

Additionally, F's Schaeffer's put/call open interest ratio (SOIR) of 0.98 sits higher than 79% of all comparable readings taken in the past year. In other words, short-term speculators are more put-heavy than usual toward shares of Ford Motor.

Technically speaking, Ford Motor Company (NYSE:F) has shed 18% since hitting its most recent high of $15.84 in late October. More recently, the $13 mark has served as a stern level of resistance since early January. In fact, F has not finished a session north of here since Jan. 6.

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