Ford Motor (NYSE: F) has been skidding lower for weeks, but one investor apparently thinks that the automaker is regaining traction.
More than 50,000 F December 15 Puts were sold for $2.10 against open interest of 12,838 contracts. Aside from exchange-traded funds, it was the largest transaction on any name in the options market so far today.
The move appears to be a long-term bet that F is done dropping and will hold its ground or inch higher. Investors often sell puts on stocks they like but don’t want to purchase right away. The strategy lets them collect income in return for agreeing to buy shares at the strike price.
F is down 1.04% to $14.32 in afternoon trading and has lost 22% of its value since Jan. 28. That’s when the company reported earnings far below expectations, squeezed by higher costs and discounting in Europe. The news was a jarring surprise to investors accustomed to the stock gliding higher over the last two years.
The declines have brought F back to $14, a level where some chart watchers may expect support because that’s where it peaked in early 2010. It’s also the location of the 200-day moving average.