Here is some generally directional, untied options activity that caught my eye during Thursday’s trading:
1. F – saw heavier than usual put volume, 2x average with puts outnumbering calls almost 4 to 1. The largest options print on the day was a spread when the stock was 16.18. It appeared that 23,000 Jan 15 puts were bought for .99, and 14,000 Jan 17 puts were bought for 2.06. Both were marked closing (vs 163,000 of open interest in the 15 strike and 72,000 in the 15 strike). Depending how the spread was priced (as it was on a ratio) there is a chance that this was actually a trader closing an in the money put spread rather than buying one in the money put and another out of the money put. There was also an opening buyer of 7500 May 16 puts paying 59 cents when the stock was 16.16.
In early February I considered a bullish trade in F (Name That Trade: Ford Pick-up?) on the back of very strong January sales and a pick up in wage inflation from the Jan Jobs data. The stock has since traded between $16 and $16.50 and just the other day reported very disappointing February sales. Let’s see what the Feb jobs data brings by way of wage inflation as I remain positively disposed to a trade that targets a move back towards the prior highs at $18, but the stars really have to line up for me to pull the trigger as I remain skeptical as to the ability for the S&P to have meaningful gains from current levels if the Fed does signal rate increases in June at their March 18th meeting.
2. TMUS – total options volume ran 3x average with all but 58 contracts puts. When the stock was 32.65 a trader sold to close 5,000 March 30 calls at 2.79 and bought 10,000 May 33 calls for 1.77 to open rolling a bullish view up and out.
3. TSLA – when the stock was 203.
I really have tried to be constructive on the story, with little focus on valuation. But the news flow seems bad at best, especially since the company has no shortage of competition coming to market well before they are expected to release their mass market Model 3 in 2017. The company would be best to change the narrative a bit away from their existing luxury S model and the Model X SUV due later this year and get investors focused on the the battery technology, its other uses and their yet-to-be-built gigafactory. In the meantime, investors and traders are just biding time for the stock to have a meaningful technical breakdown below $200:
