Bulls Want to Drive Ford Higher
Ford Motor has been on a stealth run, and yesterday activity built rapidly in the options.
OptionMonster's tracking systems showed steady flow in the May 14 calls, with early buyers paying $0.09 to $0.12. Volume topped 25,000 barely an hour into the session and ended the day close to 39,873 contracts—well above the strike's previous open interest and therefore new positioning.
Calls lock in the price where shares can be purchased. That can give them leverage to the upside, something that we saw yesterday because the stock inched higher and those calls rose more than 10 percent to $0.14.
Ford rose 1.05 percent yesterday to close at $13.47. It has not made any explosive moves this year, but quarterly results were strong earlier in the week thanks to a rebound in North American sales.
Yesterday's option activity was skewed toward the calls by more than 5 to 1, a reflection of the session's bullish bias. Total volume was almost triple the normal amount.
—By CNBC Contributor Pete Najarian
Options Trading School:
Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC's "Fast Money" and co-founder of OptionMonster.com. Najarian owns F calls.