Monday’s Vital Data: Ford, Intel and Tesla

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U.S. stock futures are quietly trading near unchanged this morning.

Ahead of the bell, futures on the Dow Jones Industrial Average are up 0.10% and S&P 500 futures are higher by 0.01%. Nasdaq-100 futures have lost 0.03%.

In the options pits, call volume continued to run the tables on Friday. Specifically, about 22.2 million calls and 16.3 million puts changed hands on the session.

However, those calls weren’t mirrored by the action at the CBOE, where the single-session equity put/call volume ratio notched a new two-week high at 0.63. Meanwhile, the 10-day moving average held firm near 0.59.

Options traders were all about earnings on Friday. The activity was unusually hot in Ford (NYSE:F), Intel (NASDAQ:INTC) and Tesla (NASDAQ:TSLA).

Let’s take a closer look:

options trading Monday's Vital Data: Ford, Intel and Tesla

Ford (F)

Ford shares delivered a big win to shareholders after topping analyst estimates for its first-quarter earnings. The post-announcement buying binge sent F stock 10.7% higher, smashing several resistance zones along the way.

The automaker earned 44 cents per share on revenue of $2.4 billion. Wall Street was expecting earnings of 27 cents, so the monster beat had buyers swarming.

With Friday’s pole vault, F stock looks healthier than at any point for the last year. Few resistance areas exist between here and $12, so Ford can continue running if bulls want to press their bets. The volume accompanying the surge was particularly impressive and underscored the level of excitement the earnings beat generated. At 156 million, we saw the most shares change hands in a single session since 2013.

On the options trading front, traders came after calls with a vengeance. Activity swelled to 637% of the average daily volume, with 415,842 total contracts traded; 63% of the trading came from call options alone.

Ahead of the report, options were pricing in a 50 cent or 5.3% move. And that means the 10.7% rally was more than double the expected move. Volatility buyers entered the weekend flush with profits.

Intel (INTC)

While Ford’s earnings reaction was laced with profits and euphoria, Intel’s saw pain and loathing. Although the chip giant surpassed expectations for the quarter, its full-year forecasts fell short. INTC stock suffered its largest single-session loss in 11 years, down 10%.

For the quarter, INTC raked in 89 cents per share, beating estimates by 2 cents. Revenue also came in just above forecasts at $16.06 billion. However, investors were displeased by the 2019 revenue guidance of $69 billion, which came in more than $2 billion below estimates.

With Friday’s thrashing, INTC stock is back below its 20-day and 50-day moving averages. However, support looms large in the $50 zone, so that’s the area to shop the dip if you’re in a buying mood.

On the options trading front, calls outpaced puts despite the beatdown. Activity ballooned to 456% of the average daily volume, with 375,051 total contracts traded. Calls claimed 58% of the day’s sum.

Similar to Ford, volatility buyers won the day for INTC. The 9% plunge blew through the expected move of $2.58 or 4.5%.

Tesla (TSLA)

Tesla shareholders relying on mega support to halt the electric car maker’s nasty downtrend were sorely disappointed Friday. The $250 level, long viewed as a bastion of strength for TSLA bulls, finally failed. Shareholders are understandably nervous.

There’s always a chance that this turns into a false breakdown. Watch for the stock to trade back above $250 to confirm this is one big shakeout. Otherwise, batten down the hatches and expect the ugliness to continue.

On the options trading front, fearful investors and tactical bears lit a fire under put demand on the day. Activity swelled to 302% of the average daily volume, with 743,253 total contracts traded. Puts accounted for 57% of the session’s sum.

Implied volatility remains juiced, even with earnings recently passed. At 70%, implied volatility sits at the 44th percentile of its one-year range. Premiums are pricing in daily moves of $10.41 or 4.4%.

As of this writing, Tyler Craig didn’t hold a position in any of the aforementioned securities. Check out his recently released Bear Market Survival Guide to learn how to defend your portfolio against market volatility.

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