F – Ford Motor Co. – Shares of Ford are higher by an outrageous 7% at $8.56 as analysts pore over the start of data revealing the success of the government’s “cash for clunkers” scheme. No one is waiting around to see if the industry returns to a 10 million annualized pace after Ford let it slip that it had its first month over month sales increase since 2007. Bullish option positioning was evident at the August 8, 9 and 10 strikes in anticipation of a full-blown recovery for the company, the consumer and the economy. The 16,000 calls trading at the 9 strike expiring in three weeks is three-times greater than the established number of investor positions. The 10 strike also had less than 1,000 open positions before today. In the September contract, the 9 strike saw premiums change hands for 60 cents some 10,000 times implying a share price gain of 23% after driving season comes to an end. In a sign of increasing uncertainty – although in a positive light for a change – option implied volatility jumped 15% to 68% from Friday’s level.
CBS – CBS Corp. – Bullish options activity by one investor launched the American broadcasting network onto our ‘most active by options volume’ market scanner amid a rally in shares today of more than 6% to $8.70. CBS is set to report second-quarter earnings this coming Thursday, August 6, 2009. The bullish investor was rewarded today for having established long call positions in the August and September contracts back on July 6, 2009. It appears that the trader originally purchased 4,000 calls for 25 cents apiece at the August 7.5 strike, and another lot of 4,000 calls at the September 7.5 strike for 40 cents each. Today he banked gains by selling the August 7.5 strike calls for 1.25 per contract and the September 7.5 strike calls for 1.45 apiece. Finally, he reestablished a more bullish stance by purchasing 10,000 calls at the September 10 strike price for a premium of 35 cents each. The investor ultimately banked gains of about 2.05 per call option sold, or a total of $820,000. He will begin to realize additional gains on the new long call position if shares rally higher by 19% and surpass the breakeven point at $10.35 by expiration day.
TCK – Teck Resources Limited – Shares of the Canada-based firm engaged in the exploration, development, and production of natural resources, have surged more than 7.5% today to $28.31. Bullish option plays were observed on the stock in the near-term August contract. One investor appears to have rolled an established long-call position to a higher strike price in the hope that TCK continues to climb by expiration. The trader sold 1,500 calls at the deep in-the-money August 22.5 strike price for a hefty premium of 5.15 apiece. Spread against the sale, was the purchase of 3,000 calls at the higher August 29 strike for an average premium of 1.13 per contract. The investor was able to double the size of his call position, roll it to a higher strike, and take in profits by closing out the in-the-money calls. Profits enjoyed on the spread amount to 2.89. Additional profits will begin to amass for the bullish trader if shares can breach the breakeven point at $29.00 by expiration in just a few weeks.
OSK – Oshkosh Corp. – The manufacturer of specialty commercial trucks jumped onto our ‘most active by options volume’ market scanner this morning as investors initiated bullish option trades on the stock. Shares of OSK surged more than 10.5% to $30.42 after the firm won two U.S. military orders, valued at an estimated $2.13 billion, to manufacture all-terrain trucks utilized to protect troops in Afghanistan from roadside bombs. Traders positioning for a continued rally in the stock targeted the near-term August 35 strike price to purchase more than 4,400 calls for an average premium of 50 cents apiece. Investors long the calls will begin to realize profits if shares increase another 17% to surpass the breakeven point at $35.50 by expiration. Option implied volatility on OSK has risen throughout today’s trading session from a starting value of 59% to the current reading of 65%.
