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

Weekly options traders have taken aim at auto stocks Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM)

Dec 5, 2016 at 11:55 AM
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The 20 stocks listed in the table below have attracted the highest weekly options volume during the past 10 trading days. Stocks 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 auto stocks Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM), after both companies posted better-than-expected November sales last week. Here's a quick look at how options traders are lining up on F and GM.

MAO Dec 5

Since bottoming near $11 roughly one month ago, has added 12%, including its 1.3% gain today to trade at $12.40. At the same time, the shares are still 12% lower on a year-to-date basis, and are now less than a point from their downtrending 320-day moving average, which blocked the stock's breakout attempt in July. Short-term F options traders have shown an appetite for calls nonetheless. 

Specifically, Ford's Schaeffer's put/call open interest ratio (SOIR) comes in at 0.57, meaning call open interest almost doubles put open interest among options expiring within three months. What's more, this SOIR sits just 8 percentage points from a 12-month low. Said differently, near-term F options traders are more call-skewed than normal. 

Looking more closely, the stock's weekly 12/9 12-strike call saw the largest increase in open interest among all weekly options during the past 10 days, and the second highest overall. Data from the major options exchanges confirms substantial buy-to-open activity here, indicating traders are betting on extended upside for F shares through the end of the week, when the contracts expire. 

Turning to GM, the stock has rallied almost 17% since its most recent bottom of $30.21 on Nov. 9 to trade at $35.27, putting it in positive year-to-date territory. Activity in the options pits over the past two weeks is highlighted by huge open interest increases at the weekly 12/9 38.50-strike put and call, with more than 50,000 positions added at each. While it's unclear how traders are positioning themselves here, the shares haven't seen the $38.50 level since March 2015.

On a more general basis, data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows GM options traders have preferred puts over calls, despite the stock's strong showing on the charts. GM has posted a 10-day put/call volume ratio of 1.35 across these exchanges, ranking above 72% of the past year's readings. In fact, put open interest is poised at an annual high. As some of these bearish positions begin to unravel, it could provide an extra boost for GM on the charts.

Finally, it's opportune time to buy near-term options on Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM), no matter how you're betting. Specifically, F's Schaeffer's Volatility Index (SVI) of 24% ranks in the bottom one-fifth of its annual range, while GM's SVI of 26% ranks in the 34th annual percentile. Simply stated, the options market is pricing in unusually low volatility expectations for both F and GM.

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