Options Trading News

May 7, 2013  Tue 11:24 AM CT

A large complex call spread tops today's option activity in Ford as shares move back toward their January highs.

The strategy involved 10,000 January 15 calls that traded for $0.72 in volume well below the previous open interest of 169,905, according to optionMONSTER systems. At the same time 20,000 January 19 calls were sold for the bid price of $0.08 with no open interest at that strike.

This could be a new vertical spread that is looking for shares to rise to, but not beyond, the $19 level. Alternatively, the trader could be rolling a short-call position to a higher strike while doubling its size. The latter would have an initially bearish bias but could profit with shares anywhere below $19.08. (See our Education section)

F is up fractionally to $14.11 this afternoon. The auto maker is off its highs of the morning but still at its highest level since January, when it peaked at $14.30. Shares have tested support near $12 twice in the interim.
Share this article with your friends


Premium Services

Education & Strategy

The art of trading

As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

View more education articles »