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Looking At "Ford" Calls On A Tuesday Morning Opening.

Here is how it is set up to go. We are expecting a slightly weak opening on Ford and the D.J.I.A. in general. Yes there is Ford news before the opening. There is yet another recall, this time for a wiper blade issues on over 400,000 late model units. It's fresh breaking news. At least it's not for engine or transmission issues. In an odd sort of way this news will help to get past customers back into their showrooms and it should be a quick fix. Maybe I am just guessing, it will cost them twenty million..
Look at these two premarket readouts, the second one at 9:00 a.m.
Can you see Ford trading down in the premarkets?. How much will these 11.5 series of Call options drop in price? That's the question.
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Shown above are the 11.5 series of Calls that expire in four trading sessions (on Friday). They closed yesterday at $.21 cents and are "in-the-money" based on the the stocks closing selling price. They are "in-the-money" by $.11 cent and it will cost you less than $21.00 dollars plus commissions to purchase one contract. Some traders will purchase fifty or one hundred contracts at a time. Given the expected weak opening you will be able to pick up these Calls for less on the opening or shortly thereafter. Might the recall news be quickly discounted? That's the hope for Call option players jumping in. Recalls are afterall, not new to Ford. There also are rumors that Ford is thinking of repurposing one of their idled plants to build products that complemnet the needs of Ai companies. Here is it's five day chart which looks somewhat perky. Monthly production numbers a few days back also came out which in part reflect this perkiness.
Let's skip forward to the end of the day.
Notice the drop to $10.00 a contract and then a rebound to a high of $.24. It was the recall news that put a scare into things on the opening. Here is how it traded on the day.
These next two printouts show this movement even better.
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Are you able to see when it dropped down to $.10 just after the opening. One of the reasons I find value with playing it is that every month they report production numbers and these numbers influence which way the stock is going to move. When you add to the equation things like the random recall news we saw today you can build a case for how the stock could react. It's also not the kind of stock you would want to play options on everyday. It can get kind of boring watching this stock. Some traders soley trade it's one and two year out options because options on stocks in this price range offer excellent leverage. That in itself is another blog.

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