Q2 STOCKS TO BUY

$2.2 Billion Setback Weighs on Ford Motor Stock

Short-term traders are more put-biased than usual

Managing Editor
Jan 23, 2020 at 9:08 AM
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Ford Motor Company (NYSE:F) stock is eyeing a lower open, after the car manufacturer late Wednesday night announced it will see a $2.2 billion pre-tax loss in the fourth quarter due to an increase in contributions to employee pension plans. In terms of earnings, Ford is scheduled to report earnings early next month, on Tuesday, Feb. 4.

On the charts, F has struggled to gain positive momentum, and remains 13% below its mid-July peak of $10.56, through last night's close at $9.16. The shares are currently churning between resistance at their 200-day trendline and support at the 50-day moving average, and haven't traded in double-digit territory since before a late-July earnings-induced bear gap.

Digging deeper, Ford Motor stock sports a Schaeffer's put/call open interest ratio (SOIR) of 1.54. This ratio sits in the 96th annual percentile, meaning short-term traders have rarely been more put-biased during the past 12 months. 

Regardless, options premiums are still relatively tame, even with earnings on the immediate horizon. The security's Schaeffer's Volatility Index (SVI) of 27% sits in the 32nd percentile of its annual range. This means short-term options are pricing in fairly low volatility expectations right now.

 

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