Unusual Options Activity: Ford (F)

Shares of car manufacturing giant
Ford (F) have been doing well this year. One trader sees that trend continuing well into the next year.

That’s based on the June 2022 $22 calls. The trade has 336 days left until expiration. Over 6,200 contracts traded against a prior open interest of 320, for a 19-fold rise in volume. Based on where shares last traded in the low $14 range, the stock price would need to surge over 54 percent to move in-the-money.

The buyer of the options paid about $0.52 for a contract.

The carmaker has seen shares rally strongly this year as the company has unveiled electric and hybrid versions of its popular cars, eating into the market share of pure-play EV firms.

Strong earnings have led to shares trading at about 15 times earnings, even after a 114 percent rise in the past year.
Action to take: Investors may like shares here to play the rise of electric vehicles by owning shares of a firm with over a century of history in the automotive market. Shares don’t currently pay a dividend, but it would be the least leveraged way to play shares.

Traders may like the call options, as their low price could result in a potential triple-digit return if the rally in shares continues. The option has plenty of time to play out for those returns.

 
Disclosure: The author of this article has no position in the company mentioned here, but may make a trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.