Ford just announced December U.S. total vehicle sales up 32 percent and the shares jumped 8.5 percent, back up to over $11 per share!
The leader of this company, Alan Mulally, has got to be the CEO of the decade. When he first became the CEO in 2006 he mortgaged many of Ford’s assets to raise $23.5 billion for a complete corporate restructuring. This was why last year when the other major U.S. auto manufacturers required huge government loans and guarantees, Ford was able to continue as an independent concern.
Today’s numbers confirm the wisdom of that decision.
This news has lead traders to race for the calls. Specifically, I am seeing March 11 calls being bought at 79 cents, 3,000 times.
This bullish activity likely believes more upside is in store for Ford’s shares. The maximum profit is theoretically unlimited above strike to a long call while the risk is limited to the premium paid. The shares will need to rally another 7 percent before March expiration to recover the premium paid in this trade.
Photo Credit: DonBuciak
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