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Traders tap the brakes on Ford

Ford shares are flat this year, but one options trader is betting that the stock could fall more than 12 percent in the next month.

On Thursday, put activity outpaced that of calls by three times, primarily due to one large bearish bet. Specifically, the trader bought 18,000 of the May 14-strike puts for 6 cents each. Since buying a put gives one the right to sell a stock at a given price and time, this is a bet that Ford's shares will be below $13.94 by May expiration.

"The interesting thing about this trade is it's going to capture earnings on April 28," said Mike Khouw, a CNBC contributor.

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Sharp moves on earnings are uncommon for the automaker. Over the past eight quarters, the shares have moved around only 2 percent on average on the day it reports. But curiously enough, while the stock doesn't move too much on the actual day that it reports, it does tend to move sharply in the weeks after earnings.

According to Khouw, over the past 10 years, Ford shares have seen an average move of 14 percent in the two weeks after it reports. Current prices for puts and calls are implying a 3 percent move on earnings.

Wall Street analysts are expecting Ford to post first-quarter earnings of 27 cents per share when it reports on April 28 before the opening bell.

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    Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

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