F – Ford Motor Co. – Options investors wary of the potential for the auto maker’s shares to continue lower ahead of July expiration purchased out-of-the-money put options today with shares of the underlying stock off 2.00% to stand at $10.79 as of 12:35 pm (ET). Bearish options players picked up 5,000 puts at the July $9.0 strike for an average premium of $0.47 per contract. Put buyers profit if Ford’s share price declines another 20.95% to breach the average breakeven price of $8.53 by July expiration day. Pessimism spread to the lower July $8.0 strike where 1,900 puts were picked up at an average premium of $0.26 each. Investors long the lower strike put contracts make money if shares of the underlying stock plummet 28.25% from the current price to break through the average breakeven point to the downside at $7.74 by expiration in a couple of months.
Affiliation: Interactive Brokers
Andrew Wilkinson is the senior market analyst at Interactive Brokers Group, where he provides daily commentary and analysis on U.S. equity options trading throughout the trading day. Andrew provides webinars designed to explain option-related trading scenarios covering futures, fixed income, forex and equities.
Interactive Brokers: Interactive Brokers offers direct market access to around 80 electronic global markets from a single account. Successful traders and investors understand that superior technology and lower trading costs can result in greater returns. For 32 years we have been building direct access trading technology that delivers real advantages to professionals worldwide. With consolidated equity capital of US $4.4 billion, IB and its affiliates exceed 1,000,000 trades per day. In addition, our prudent and conservative risk policies make Interactive Brokers a safe haven for your money. Discover some of the reasons why IB, the largest independent US broker/dealer, is the professional traders' and investors' choice.
Visit: Interactive Brokers