Get ready for Ford (F) earnings on Friday. I've been watching the chart ($F) and option activity for over a week now (see post on 7/14 and 7/20). Calls were mainly active in my previous posts, but today saw put volume in August above open interest. Calls were still heavily traded though and the ISEE ratio actually favored calls, I'll get into that later. At the close a total of 31,099 August $11 Puts traded with 24,116 already open. I'm not sure if they were opening or closing trades, naked sales or connected with stock, just pointing out that the Aug $11 put was in play (like calls last week) with volume > open interest in decent size. The put closed at $0.36 and would profit if $F traded below $10.64 before August expiration (or volatility spikes on a downside move). Ford closed at $11.55. Back to the ISE Call/Put Ratio. The ISEE ratio (ISE customer calls opened vs. puts) favored calls today: Calls: 3.83K / Puts: 802 with ISE implied volatility at 44.77 and historical volatility at 40.75.
The chart is saying it's a coin toss, we'll see what happens tomorrow. It either breaks through the 50 and 200 day moving averages and ascending channel support to the downside or spikes through $12.15 ceiling resistance. F either sees $9 (-22%) or $14.57 (+26%) when all is said and done based on support and resistance levels (straddle?). Implied volatility hasn't really exploded. After the jump is the August option chain, $F stock chart and Ford news and opinion. I have no position. I wanted to also point out that the S&P hasn't cleared the downtrend yet. If there's continued weakness it could act as a cross-current to positive earnings. Not saying SPY/F couldn't decouple though. Thoughts?
*UPDATE 7/22 11:58am: $F is back inside the ascending triangle at the vertex point (on ascending channel support (+3.64%, $11.96) right under ceiling resistance. As I've been saying, if I was long into earnings I'd own some simple in the money put insurance to manage volatility risk! (see comment for chart).
F August Option Chain (Calls and Puts) - Yahoo Finance option chain link
F (Ford Motor Co.) - FreeStockCharts.com
Ford will offer hybrid at same price as gas mode - AP
Ford showcases next generation of Sync and new touchscreen user interface - RCR Wireless
Ford Has Had Its Day - Motley Fool
Ford Scuttles Debt Deal as Overhaul Chills Market - Wall Street Journal
"Ford Motor Co.'s financing arm pulled plans to issue new debt, the first casualty of a bond market thrown into turmoil by the financial overhaul signed into law Wednesday."
2011 Ford Explorer expected to increase sales, Crossover platform, greater fuel efficiency give new vehicle boost - Detroit News
Ford to launch 2011 Explorer on Monday on Facebook - AP
Social Networking for Cars (car wired to Twitter) - NYT Blogs
Auto Industry Outlook and Review – July 2010 (July 13) - Zacks Research
Ford to Clear More than $4B in Debt - Analyst Blog (July 1) - Zacks Research
Ford’s Debt Payment Means Dividend May Return as Soon as 2012 (July 1) - Bloomberg
Recent Press Releases
2011 FORD EXPLORER WITH ECOBOOST LEADS SEGMENT; DELIVERING AT LEAST 30 PERCENT BETTER FUEL ECONOMY - Ford
FORD AND NUANCE ADVANCE VOICE RECOGNITION OF SYNC: NOW FASTER, FRIENDLIER, MORE PERSONAL - Ford (Youtube)
FORD WINS MOST AWARDS IN J.D. POWER APEAL STUDY ON VEHICLES THAT EXCITE AND SATISFY - Ford
2011 FORD SHELBY GT500 IN HIGH DEMAND, RAPIDLY APPROACHING PRODUCTION LIMIT - Ford
2011 FORD EDGE OFFICIALLY HAS TOP FUEL ECONOMY AND BEST-IN-CLASS POWER - Ford
PERSONALIZE YOUR FORD FIESTA: ACCESSORIES, BODY KITS AND GRAPHICS PAVE THE WAY - Ford