Ford Stock Flies Through Resistance, Options Traders Place Big Bets

Ford Motors Company F was trading up over 3.5% higher Monday amid renewed interest in the EV and automaker sectors. The stock drove straight through resistance at the $14.23 mark after consolidating under the level on smaller time frames.

Technical traders may have seen the move coming because on Sept. 23 Ford broke up from a descending trendline that had been holding the stock down since reaching a June 4 high of $16.45. The move allowed Ford’s stock to reclaim the eight-day and 21-day exponential moving averages which indicated bullish continuation was in the cards.

Options traders believe Ford’s stock will fly higher still and on Monday hammered dozens of bullish call contracts. Together the traders purchased over $1 million worth of calls. The options trades below only include orders with a total cost of over $50,000 and total $760,062.

See Also: Ford CEO Says EVs Remain Beyond Reach Of Average Buyers — Mining Needs To Be Brought Back To US Alongside Battery Production

Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price. A sweeper pays the market price for the call or put option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.

These types of option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.

The F trades: Below is a look at the notable options alerts, courtesy of Benzinga Pro:

• At 9:53 a.m., a trader executed a call sweep near the ask of 1,005 Ford options with a strike price of $14 expiring on Oct. 15. The trade represented a $50,250 bullish bet for which the trader paid 50 cents per option contract.
• At 10:04 a.m., a trader executed a call sweep near the ask of 2,752 Ford options with a strike price of $14 expiring on Oct. 1. The trade represented an $85,312 bullish bet for which the trader paid 31 cents per option contract.
• At 10:06 a.m., a trader executed a call sweep near the ask of 1,253 Ford options with a strike price of $14 expiring on Oct. 15. The trade represented a $65,156 bullish bet for which the trader paid 52 cents per option contract.
• At 10:06 a.m., a trader executed a call sweep near the ask of 12,747 Ford options with a strike price of $14 expiring on Oct. 1. The trade represented a $407,904 bullish bet for which the trader paid 32 cents per option contract.
• At 12:08 p.m., a trader executed a call sweep near the ask of 1,000 Ford options with a strike price of $15 expiring on Nov. 19. The trade represented a $52,000 bullish bet for which the trader paid 52 cents per option contract.
• At 12:47 p.m., a trader executed a call sweep near the ask of 226 Ford options with a strike price of $10 expiring on Jan. 21, 2022. The trade represented a $99,440 bullish bet for which the trader paid $4.40 per option contract.

F Price Action: Ford Motors was trading up 2.76% at $14.16 on Monday afternoon. 

Photo: Theodor Vasile via Unsplash