Sizable Call Spread Constructed on Ford (F)

F – Ford Motor Co. –Shares in Ford are moving higher, up 3.0% at $16.82 at present after the automaker reported that August U.S. retail sales rose 20%, the best monthly retail performance for Ford since 2006, according to a company press release, and a 12% increase in total sales. A large 7,500-lot Mar 2014 $18/$20 call spread that appears to have been purchased on Ford within the first 10 minutes of the opening bell for a net premium of $0.46 per contract is profitable above the effective breakeven price of $18.46, with maximum potential profits of $1.54 available at expiration next year in the event Ford shares surge 19% to $20.00. Shares in Ford last traded above $20.00 back in 2001.

About Caitlin Duffy 373 Articles

Affiliation: Interactive Brokers

Caitlin Duffy joined Interactive Brokers in 2009. In her role as Equity Options Analyst, Caitlin provides daily market commentary; highlighting various options trades, trading patterns and strategies of interest. Through Interactive Broker's webinar program, Ms. Duffy presents a number of educational, options-related events describing the theoretical pricing of options, the option Greeks as well as options strategies.

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