Ford Motor Co. (F) is trading below $2 per share. But, so far, of the ‘Big Three’ automakers, Ford has had the strongest balance sheet and the best chances of reaching the other side of this recession with all of its parts still attached and running.
In the options market, it appears investors may be betting that Ford might really put the pedal to the metal and run above $7.50 by the Jan. 15, 2010 expiration. We are seeing more than 25,000 January 2010 Long-term Equity Anticipation Securities (LEAPS) contracts trade today at the $7.50 strike.
Ford may be the counter bet to General Motors (GM).
If GM goes bankrupt, consumers who want to “buy American” may turn to Ford, giving the company a sales boost in the midst of a broader industry slowdown. GM is down 18% today, while Ford was up slightly during a day when the market is in full on melt-down mode.
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