Ford Motor has been skidding lower for weeks, but one investor
apparently thinks that the automaker is regaining traction.
More than 50,000 December 15 puts were sold for $2.10 against open
interest of 12,838 contracts. Aside from exchange-traded funds, it
was the largest transaction on any name in the options market so
The move appears to be a long-term bet that F is done dropping and
will hold its ground or inch higher. Investors often sell puts on
stocks they like but don't want to purchase right away. The
strategy lets them collect income in return for agreeing to buy
shares at the strike price.
F is down 1.04 percent to $14.32 in afternoon trading and has lost
22 percent of its value since Jan. 28. That's when the company
reported earnings far below expectations, squeezed by higher costs
and discounting in Europe. The news was a jarring surprise to
investors accustomed to the stock gliding higher over the last two
The declines have brought F back to $14, a level where some chart
watchers may expect support because that's where it peaked in early
2010. It's also the location of the 200-day moving average.
The next scheduled event that could serve as a potential catalyst
for the company is the release of monthly sales on April 1.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.
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