Ferrari’s (NYSE:RACE) Stock Option Call Volume Surging

Ferrari’s (NYSE:RACE) Stock Option Call Volume Surging

Ferrari’s (NYSE:RACE) Stock Option Call Volume Surging


Ferrari’s (NYSE:RACE) Call volume spiked Tuesday, with more than 4,800 contracts crossing, compared to a daily average of 667.

The data say that more than 50% of that volume is for the February 2019 105-strike Call, where 1 player bought more than $2-M worth of options, about 2,800 contacts via multiple trades throughout Tuesday’s session.

The speculation is a bet on Ferrari stock running higher above 105 months ahead, with the shares last seen just above the strike at 104.54, down about 4% on the day.

Tuesday’s price action on the iconic Italian Supercar maker, which has been trending lower since its 15 June high at 149.85.

During the the past 3 months, Ferrari entered a Bear market and is off nearly 19%, and is flirting with its 52-wk low from January 2018, with this area home to the YTD breakeven point. .

race stock chart

Tuesday’s huge Call buyer betting against Ferrari’s recent technical performance, but also moving away from the recent Put-buying trend seen from Ferrari options traders.

More specifically, data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 10-day put/call volume ratio of 1.67, which ranks in the 94th annual percentile, showing a stronger-than-normal demand for long Puts.

So, it is not surprising to see Put open interest greatly outweighing Call open interest, 27,549 to 11,658.

Again, the Put number ranks in the high 94th annual percentile, while the Call number sits in the 15th annual percentile.

Regardless of which way you bet, anyone buying premium right now is dealing with elevated volatility expectations based on the 30-day at-the-money implied volatility of 33%, landing in the 88th annual percentile.

We like the idea of buying when the Aristocrats are out of favor, Ferrari is The Aristocrat of the automotive sector.

Symbol Last Trade Date Change Open High Low Volume
NYSE:RACE 104.54 27 November 2018 -4.68 106.99 107.29 103.98 918,111
HeffX-LTN Analysis for RACE: Overall Short Intermediate Long
Very Bearish (-0.52) Bearish (-0.48) Very Bearish (-0.58) Very Bearish (-0.50)

Stay tuned…


Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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