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Ford Stock Pops on Company's $11 Billion Investment

Ford stock is seeing six times its typical options volume at this point in the day

Deputy Editor
Sep 28, 2021 at 10:39 AM
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The shares of Ford Motor Company (NYSE:F) are up 3.5% to trade at $14.66 at last check, after the company announced an $11 billion investment, which is being made alongside South Korean partner SK Innovation, to accelerate its push into electric vehicles. Ford has plans to open a new assembly plant and three battery factories in Tennessee and Kentucky, which in turn will create 11,000 jobs.

Options activity is ramping up following the news. In the first hour of trading, 140,000 calls and 31,000 have exchanged hands, which is six times the amount typically seen at this point. Most popular is the weekly 10/1 14.50-strike call, followed by the 15-strike call from the same series, with new positions being opened at the latter. This shows plenty of traders betting on the equity to move back toward old annual highs by the end of week. 

Meanwhile, bears have been crowding the options pits. Ford stock sports a 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than 97% of readings from its annual range, indicating a relatively stronger-than-usual penchant for puts.

That said, speculating on the security's next move with options could be a prudent play. The stock's Schaeffer's Volatility Index (SVI) of 33% stands higher than just 3% of all other readings in its annual range, implying that options players are pricing in low volatility expectations at the moment. 

Today's pop has Ford stock trading back above the $14.40 area, which hasn't been done on a consistent basis since June. In early August, long-term support at the 120-day moving average began to put pressure on F, however that trendline is back in place as a layer of support after three-straight daily wins. Year-over-year, the security has tacked on 117.3%.

 

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