Options Trading News

April 26, 2013  Fri 5:16 AM CT

Ford has been on a stealth run, and yesterday activity built rapidly in the options.

optionMONSTER's Heat Seeker system 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.

Long 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. (See our Education section)

F 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.

Disclosure: I own F calls.

(A version of this post appeared on InsideOptions Pro yesterday.)
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I have written a few things on the Covered Call Strategy over the last two weeks. Please understand that those two previous articles plus this one do not constitute a proper, fully in-depth lesson on the Covered Call Strategy like we have in our classes at Option Monster Education. I have picked out a few topics that I believe were worth noting and today I am going to add the final one.

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