A large call spread topped Ford's unusual option activity on Friday as shares rallied.
F rose 4.32 percent on the session to finish the week at $12.79. The auto maker's stock is off its highs from the previous week but has largely regained the ground it lost after its last earnings report on Jan. 27. Shares were trading near support levels at $10 six weeks ago.
optionMONSTER's systems show that 248,000 Ford options traded on Friday, compared to an average of 96,000, with calls outpacing puts by more than 4 to 1. A trader bought 29,133 April 14 calls for $0.22, above the ask price, and sold the same number of April 15 calls for the bid price of $0.07.
This call spread cost the trader just $0.15, which will be lost if F is below $14 at expiration. But if the stock trades back above $15 at that time, the trader can make $0.85. The trade has an excellent risk/reward ratio but also a low probability of success. (See our Education section)
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