Posts Tagged ‘F’

Option Trading Strategies for Ford Motor (F) Investors

Tuesday, December 21st, 2010

Ford Motor option strategies With General Motors (NYSE:GM) available again for public trading, Ford Motor (NYSE:F) has gone back to sharing the trading spotlight. But this doesn’t take away from the stock’s impressive performance; Ford shares are up 68% year to date and have climbed nearly 470% during the past two years.

Last week, Mad Money host Jim Cramer reiterated his bullish take on Ford, noting that, “earnings power is huge and the balance sheet is getting better … it would not shock me to see Ford at $20 to $25 next year.” A move to $20 would be a 20% jump in the stock; a move to $25 would mean a gain of almost 50% from current levels. (more…)

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General Motors (NYSE:GM) Options Start Trading

Wednesday, December 1st, 2010

Ford and GM options trading Twelve days ago, we had the much-anticipated initial public offering (IPO) of General Motors (NYSE:GM). Monday of this week, options on the Detroit-based automaker were (again) listed for trading.

One might have thought that the new GM options would trade with a higher implied volatility than its competitor Ford Motor (NYSE:F), which is free of any government assistance and in the hands of the public. One would, however, be wrong. (more…)

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Ford (F) Options Surge in Popularity Ahead of GM IPO

Thursday, November 18th, 2010

Ford Motor option volume Ford Motor (NYSE:F) has seen options volume and volatility ramp higher this week in anticipation of today’s General Motors IPO.  According to our volatility charts, 30-day implied volatility has increased in Ford over the past week from 39% to 52%, hitting its highest point since early July. This compares to 30-day historical volatility of 33%.  The increasing trend suggests F options are in greater demand, and are therefore getting more expensive.

Roughly 810,000 Ford options traded on Monday (2.3 calls for every put) and about 730,000 traded on Tuesday (1.5 calls for each put).  This compares, for example, to October’s average daily option volume of 125,000 contracts. (more…)

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Option Strategies for Ford Motor (NYSE:F) Watchers

Thursday, October 28th, 2010


Ford Motor (NYSE:F) remains in solid recovery mode judging by its latest earnings figures announced earlier this week. In the third quarter, F earned 48 cents per share, 10 cents better than analysts were expecting and 22 cents better than the year-ago period. Revenue, however, fell 4.3% year-over-year (but grew by $1.7 billion if the Volvo brand is excluded). After an initial drop out of the gate, Ford shares quickly recovered, closing up 1.5% in Tuesday’s trading.

The day after earnings hit the Street, analysts with UBS upped their 12-month price target on Ford to $18 from $16, reflecting nearly 30% in additional upside from current levels. The firm adjusted its target based on the company’s proven ability to expand its market share with new products.  According to Briefing, UBS also feels Ford will improve its balance sheets in such a way that the company could be at a net cash position by the end of the year.

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Bullishness Building in Ford Motor (NYSE:F)

Tuesday, October 5th, 2010

Bullishness building in Ford Motor (F) Ford Motor (NYSE:F) got the week off to a good start, rising almost 5% Monday on the heels of a vote of confidence from Morgan Stanley. The brokerage firm initiated coverage on the automaker with an “overweight” rating and a 12-month price target of $20, which is 55% north of the stock’s current level.

The covering analyst argued that Ford is well positioned to enjoy strong sales over the news few reporting periods. He also opined that investors are currently underestimating the company’s revenue potential. His estimates for Ford’s sales are $115 billion this year and $129 billion next year, with earnings per share expected at $2.60 (above the Street’s consensus view of $1.83).

Today’s move sent the stock sharply higher, easily outperforming the downtrending broader market. F is now within striking distance of the 13 level, above which it hasn’t traded since early April. Technical-analysis fans may have their eye on this strike as it could prove to be support (once it is hurdled) or resistance. (more…)

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Bullish options strategy in Ford Motor (NYSE:F)

Wednesday, September 8th, 2010


Ford Motor (NYSE:F) shares drifted lower along with the broader market Tuesday, down roughly 2.2% to $11.80, breaching the 12 strike. Perhaps seeing this is a buying opportunity, a large-scale investor put on a bullish intermediate-term trade to bank on upside through the end of the year.

The December 12 and 13 calls both saw nearly 15,000 contracts change hands yesterday. A series of large blocks hit the tape in rapid succession within the first hour of trading.  The 12-strike calls traded at an average price of $1.02 per contract, which was at or near the ask price at the time.  The further-from-the-money 13 calls traded in similar blocks for 57 cents apiece (at or near the bid price). (more…)

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Bullish and Bearish Option Strategies for Ford Motor (NYSE: F)

Wednesday, May 12th, 2010

Jim Cramer again highlighted Ford Motor (NYSE: F) shares in a recent episode of Mad Money.  The bombastic TV analyst screamed that buying Ford shares is a smart move, particularly for long-term investors.  This past 14 months, Ford has seen a tremendous rally, from a low of $1.65 in March 2009 to a peak of $14.57 in April 2010.  The shares lost a bit of ground in the past two weeks, but now appear to be attempting to rally once again.  In Tuesday’s session, the stock closed marginally higher at $12.31.

While 100 shares of Ford won’t exactly break the bank at $1,231, there are ways to invest in Ford using options.  Depending on the strategy selected, options trades may require a lower capital outlay and can also benefit from the concept of leverage (some options can theoretically yield a potentially higher percentage return than the stock outright).

Two hypothetical options trades (both debit spreads – one bullish, one bearish) are described below. Remember, these are just examples, not recommendations, and be cognizant of your personal risk/reward parameters before executing any new trades. (more…)

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Bullish on Ford (F)? Buying the Stock is Only One Option

Thursday, April 8th, 2010

CNBC’s Jim Cramer said Ford Motor (NYSE: F) is “going to have a miraculous quarter” during a recent broadcast of the network’s Mad Money. Cramer is so bullish on Ford, he stated that the United Auto Workers’ decision to sell its Ford common-stock warrants will not have negative repercussions on the shares. In fact, he recommends buying either the warrants or the F shares.

Ford has gained 287% in the past 12 months and is fresh from a new 52-week high. Currently, the stock is trading at $12.58.

Thinking Beyond Buy, Hold, Sell…

Focusing on stock plays exclusively, Cramer is limited to the traditional buy, hold, and sell rating system. By trading Ford (and other stocks) with option strategies in lieu of buying or shorting the stock itself, investors can commit less capital (and occasionally limit risk).

Like Cramer’s optimism? Consider bullish strategies. Feel Ford is overbought at its current level? A bearish options strategy might work, and might carry less risk than a short stock play.

Below are just two potential options strategies – these are not buy-sell-hold recommendations, just hypothetical examples of two trades – one bullish and one bearish.
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OptionsHouse Roundup: A Broad Market Rally and Heavy Options Activity in Ford (F) and Research in Motion (RIMM)

Thursday, April 1st, 2010

No April fool’s day pranks here as the broad market marches on higher. This rally is broad even when you look inside the indices; four stocks are up for every one that is down.

All the major market indices rallied higher today after jobless claims fell 6,000 in the week ended March 27 to 439,000 (seasonally adjusted). This lower number was a positive surprise to traders looking for a recovery in the labor markets since the prevailing consensus prior to the announcement was a prediction of 443,000.

The non-farm payroll data will be out tomorrow and will be closely watched, even on Good Friday. Markets will be closed in observance of the holiday, but we will be covering the event in our blog.

Ford (F)

Ford (F) revealed some strong overseas sales numbers in China and India, while GM (MTLQQ) reported strong sales domestically. We did see some heavy options activity in Ford this morning in a couple strikes:

F: $12.83 up $0.2600 or 2.07% volume: 79.46 million shares
Apr10 13.00 Calls: volume over 11193, versus open interest of 76446
Jun10 9.00 Puts: volume over 10930, versus open interest of 17963

Research in Motion (RIMM) was also topping the tape with a mixed, although mostly positive, earnings report. However, the company missed its earnings per share, coming in .01 below analysts’ expectations and sending the stock lower 5% towards the $70.00 level. Options traders were jockeying positions in this issue as well with volume at a relatively high level in the options and stock markets. We saw heavy action in the following strikes, but have not received detail on whether they were bought or sold.

Research in Motion (RIMM)

RIMM: $70.24 down $3.7300 or 5.04% volume: 23.11 million shares
Apr10 70.00 Calls: volume over 13762, trading last: $1.87 bid: $1.86 ask: $1.88 OI: 13896
May10 75.00 Calls: volume over 10035, trading last: $1.53 bid: $1.52 ask: $1.54 OI: 10975

In summary, there is much more data on the near-term horizon, not to mention the start of a new quarter and earnings’ season. This season will be closely watched as many would like to see the trailing p/e of the SPX, currently hovering near 19, drop down to a more normal level of 14-17. For most retail traders, the key will be staying on top of your portfolio as volatility may begin to pick up.

Remember there are a couple hours left in the trading day and the volume of these issues may continue to rise, but this is where we are seeing some heavy options activity today. Also remember that options can be bought or sold and volume does not indicate which.

These are a few of my team’s observations this morning. If you have others you would like to add to this list, please feel free to share them in the comments.

Photo Credit: wallyg

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Heavy Options Activity in Amylin Pharmaceuticals (AMLN) and Allergan (AGN)

Monday, March 15th, 2010

The broad market is still relatively sideways with volume remaining light, even with triple-witching expiration this Friday. The market is beginning to weaken a bit here, but that trend has been reversing itself over the past week. The VIX is creeping back up towards 18.75% after being pressured last Friday.

The heavy options action today was broad and present in many different stocks and sectors from General Electric (NYSE: GE) to Sallie Mae (NYSE: SLM), but we are seeing the most action in Amylin Pharmaceuticals (NASDAQ: AMLN) and Allergan (NASDAQ: AGN).

AMLN shares are sharply higher today following the issuance of a complete response letter from the FDA regarding its once-weekly version of Byetta, which will be marketed as Bydureon. For the most part we saw put selling and call buying, indicating a bullish bias from options traders. In AGN, we saw a buyer of 10,000 of the January 2011 65 calls, also indicating possible bullish sentiment. The risk to purchasing options is 100% of the premium paid but the reward is theoretically unlimited above the purchased strike.

Remember there are a couple hours left in the trading day and the volume of these issues may continue to rise, but this is where we are seeing some heavy options activity today. Also remember options can be bought or sold and volume does not indicate which:

Options Action:

GE: $17.10 up $0.0600 or 0.35% volume: 66.61 million shares
Mar10 17.50 Calls: volume over 43148, versus open interest of 181373

BSX: $6.41 down $1.3728 or 17.65% volume: 123.77 million shares
Jan11 7.50 Calls: volume over 34596, versus open interest of 53215

WMT: $55.32 up $1.4200 or 2.63% volume: 13.44 million shares
Mar10 55.00 Calls: volume over 25119, versus open interest of 58043
Apr10 55.00 Calls: volume over 12257, versus open interest of 14268

EWT: $12.11 down $0.3000 or 2.42% volume: 4.47 million shares
Jun10 14.00 Calls: volume over 20020, versus open interest of 1321

AAPL: $221.78 down $4.8192 or 2.13% volume: 9.70 million shares
Mar10 230.00 Calls: volume over 18358, versus open interest of 27297
Mar10 220.00 Puts: volume over 17829, versus open interest of 19933

BAC: $16.75 down $0.1000 or 0.59% volume: 61.20 million shares
Aug10 18.00 Calls: volume over 13943, versus open interest of 43217
Mar10 17.00 Calls: volume over 11894, versus open interest of 174442

AMLN: $22.24 up $1.9800 or 9.77% volume: 13.52 million shares
Mar10 22.50 Calls: volume over 13390, versus open interest of 30079
Mar10 20.00 Puts: volume over 10969, versus open interest of 12686

F: $13.40 up $0.0600 or 0.45% volume: 47.64 million shares
Mar10 13.00 Calls: volume over 10508, versus open interest of 80111

PEP: $65.58 up $0.4799 or 0.74% volume: 4.96 million shares
Apr10 62.50 Calls: volume over 10408, versus open interest of 35067

SLM: $12.05 down $0.1700 or 1.39% volume: 1.67 million shares
Mar10 13.00 Calls: volume over 10322, versus open interest of 13740

AGN: $62.12 down $0.1900 or 0.30% volume: 0.30 million shares
Jan11 65.00 Calls: volume over 10176, versus open interest of 6221

XLB: $33.12 down $0.1700 or 0.51% volume: 4.00 million shares
Jan11 27.00 Puts: volume over 10000, versus open interest of 3352

These are my team’s observations, if you have others you would like to add to the list, please feel free to share in the comments.

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