27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Ford Motor Company (NYSE:F) this week announced a collaboration with Argo AI and Lyft. Inc (NASDAQ:LYFT) to commercialize autonomous ride-hailing at scale.
The news helped prop Ford’s stock up another 2%, which created the top of the pole in a bull flag pattern and on Thursday and Friday, Ford’s stock consolidated which created the flag in the pattern.
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Bullish technical traders could watch for an entry within the flag or when the stock breaks bullishly from the pattern but there is headline risk coming July 28 when Ford prints its second-quarter earnings.
In its last earnings print, Ford reported adjusted EPS of 89 cents, which beat the consensus estimate of 22 cents and revenue of $36.2 billion, a 6% increase from the same period the year prior, compared to the estimate of $36 million. Following the earnings beat, the stock gapped down 3.84% and closed another 5.46% lower.
Options traders believe Ford’s stock is going to make a trek north over the coming weeks and months following its earnings print and on Friday purchased $400,764 worth of bullish call contracts. One trader paid $108,000 for 2000 call contracts at 54 cents per piece with a strike price of $14 and an Aug. 6 expiry. This trader could be looking to let his options expire in the money to accumulate shares.
See Also: Is The Sell-Off In Ford's Stock Over?
Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price. A sweeper pays market price for the call or put option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.
These types of option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.
The F Trades: Below is a look at the notable options alerts, courtesy of Benzinga Pro:
- At 9:36 a.m., a trader executed a call sweep at the ask of 320 Ford options with a strike price of $14 expiring on Jan. 21, 2022. The trade represented a $50,560 bullish bet for which the trader paid $1.58 per option contract.
- At 9:44 a.m., a trader executed a call sweep at the ask of 200 Ford options with a strike price of $10 expiring on Jan. 21, 2022. The trade represented a $88,000 bullish bet for which the trader paid $4.40 per option contract.
- At 10:09 a.m., a trader executed a call sweep at the ask of 1898 Ford options with a strike price of $17 expiring on Oct. 15. The trade represented a $39,858 bullish bet for which the trader paid 21 cents per option contract.
- At 10:52 a.m., a trader executed a call sweep at the ask of 397 Ford options with a strike price of $14 expiring on Jan. 21, 2022. The trade represented a $61,138 bullish bet for which the trader paid $1.54 per option contract.
- At 11:11 a.m., a trader executed a call sweep at the ask of 2000 Ford options with a strike price of $14 expiring on Aug. 6. The trade represented a $108,000 bullish bet for which the trader paid 54 cents per option contract.
- At 11:31 a.m., a trader executed a call sweep at the ask of 306 Ford options with a strike price of $15 expiring on Nov. 19. The trade represented a $27,234 bullish bet for which the trader paid 89 cents per option contract.
- At 12:54 p.m., a trader executed a call sweep at the ask of 234 Ford options with a strike price of $15 expiring on Jan. 21, 2022. The trade represented a $25,974 bullish bet for which the trader paid $1.11 per option contract.
F Price Action: Shares of Ford were trading around $13.82.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.