CNBC Stock Blog

Options Boil on This Auto Maker

David Russell|writer, OptionMonster

Options action was bullish on Ford Motor today as investors bet that the automaker would rally at least 6 percent in the next four weeks.

's tracking systems detected heavy buying of the August 8 calls, which traded for $0.15 to $0.39. About 43,000 of those contracts have traded so far today, almost four times existing open interest at that strike.

CNBC/ Trading School:


Ford stock is up 6.22 percent to $7.85 this afternoon and is up 33 percent in the last month. The stock needs to climb to $8.36 for the calls purchased today to turn a profit. The next apparent catalyst that could drive the shares higher is the release of July sales figures on Monday.

Auto Intelligence:

Ford has more than quadrupled since the market bottomed in March and gapped above $6.50 on July 23. Today it's working its way through a gap lower that occurred on May 22, 2008. Its next likely resistance level will probably be in the $8.50 to $8.80 range, its old high last year.

The September 7 calls were also under accumulation, trading 11,267 times for $0.80 to $1.24, although volume was far below open interest of 56,394 contracts.

Call activity in the name exceeded puts by roughly 4 to 1, reflecting the bullish sentiment.

The Other Auto Bigs:

Toyota Motor

General Motors/Motors Liquidation

Honda Motors




David Russell is a reporter and writer for .