OptionMonster's tracking systems detected heavy buying in the Weekly 16.50 calls that expire on Oct. 3, with more than 14,000 trading for 25 cents to 35 cents. Almost 5,600 Weekly 16.50s expiring on Oct. 10 were bought as well, mostly for 35 cents. Volume was well above open interest in both strikes, which indicates new money was put to work.
These long calls lock in the price where investors can purchase the automaker's stock no matter how far it might rise, letting them ride a rally for limited cost. That reduces their potential losses in the event of a drop because they can lose only the premium paid for the options instead of the full price of the shares. OptionMonster co-founder Pete Najarian cited the bullish action on CNBC's "Fast Money" program Thursday night.
Ford's stock rose 0.3% to $16.58 on Thursday. Shares ran to a 52-week high of $18.12 in July, pulled back after the company's last earnings report, and have traded sideways more recently. The next quarterly results are scheduled for Oct. 24, but there's also an investor conference on Sept. 29.
Thursday's total option volume in the name was nearly double its daily average for the last month. Overall calls outnumbered puts by 4 to 1, a reflection of the session's bullish sentiment.
Najarian owns F calls; Yamamoto has no positions in the name.