As we head to lunch, the market is slightly higher but not by much. Meanwhile, Ford Motor (F, $4.80, down $0.18) shares fell to a low of $4.54 in early trading. General Motors (GM, $11.33, down $0.22) hit a low of $10.57. As you can see, both stocks are trading lower ahead of Tuesday’s June vehicle sales reports.
Wall Street is looking for double-digit percentage declines from both auto-manufacturers as gas prices continue to weigh on sales of SUV’s and overall inventory levels.
Certainly not good news but it is if you are in the Ford July 6 puts (FSI, $1.40, up $0.33). I have been touting them for over a week and they are up another 30% today. These options hit a high of $1.58 this morning which is over 200% higher than the $0.47 they were going for on 6/20 when I first mentioned them. Our stop was raised to $0.90 and you should go ahead and move it up to $1.25.
As for General Motors, the July 10 puts (GMSB, $0.59, up $0.12) are seeing swelled voume as nearly 10,000 contracts have traded. They hit a high of $0.82 this morning. GM is at 50-year lows and it’s quite possible the market takes it below $10 if the June sales are worse-than-expected.
Rick Rouse
Rick@OptionsMentoring.com
