Today’s Impact Money Trade
Big money is going off today – and the best trade that hit my radar has got to be this one on Ford Motor Co. (NYSE:F).
F has been on fire as of late. It’s up over 18% in the past month alone:
F, Sep-Oct 2021
And the auto company caught this big-money trader’s eye:
On the surface, this looks like an outright buy of 30,000 contracts on the June $12 puts – a bearish trade, right?
I did some digging here. And this trader also bought some stock shares. That changes the complexity of the trade. It’s not bearish – it’s a hedge against a long position, meaning it’s neutral to bullish.
Listen. Why would this big money trader buy puts in this magnitude?
Because they don’t want to dump their stock.
They want to hold onto Ford, because they think something big is coming for this name…
And I have to agree.
I know what you’re thinking. I’ve been calling for F to make a run at $20 for months, and it keeps failing me. But Ford is my drug, and I can’t stop coming back.
I’d follow this sneaky bullish trade on F with the January 2022 $15 calls for about $1.25 – a great way to play F into the new year.
Another option (no pun intended) would be selling the $13 puts at $0.40, collecting the premium and using it to buy the $16-$20 call spread.
Doing something low-cost in Ford makes a lot of sense to me – and I’m going to prove the haters wrong:
Two words: challenge accepted. Just you wait, guys! This is a trade I’ll definitely be following up on…
More than one stock on my Watchlist today is seeing some impressive big-money flow…
1. Uniti Group Inc. (Nasdaq:UNIT)
This REIT has dropped a good $0.70 in the last two days, which is a pretty significant move in a $12 stock:
UNIT, Sep-Oct 2021
IV is fairly cheap, and I’m looking at the January $11 puts for $0.45 as a really inexpensive play on this thing having some continued pressure downward.
2. Verizon Communications Inc. (NYSE:VZ)
VZ got smoked yesterday – and honestly, it hasn’t been doing well for a while, ever since Buffett moved in back in mid-May.
VZ, April-Oct 2021
But someone came in on the lows with an outright bullish offer – one that I’m interested in piggybacking as a big trade on weakness.
Earnings are coming up on October 20 – but even so, IV is relatively low right now. And I’ve got my eye on the November $52.50 calls in VZ.
3. Carnival Corp. (NYSE:CCL)
Speaking of big money flow – check out this 20,000-contract call spread on CCL:
For $1.28, this trader bought a 10-month-out direct play on a reopening trade. It’s pretty straight forward – this trader is looking for CCL to go up, making another run above $30 by next summer, just like it did last summer:
CCL, April-Oct 2021
I’ve liked CCL for a while now – and this big-money trade is the two-factor authentication I’ve been looking for. If I’m piggybacking this one, however, I’m not looking at June.
The September 2022 $35 calls are about $1.25-$1.30, and they give you a bit more time than the June calls here. If CCL goes as high as $40, you’ve got a fat long-term profit on your hands.
VIX Traffic Light
We’re still looking at a yellow VIX light today.
The market is in flux. The VIX is above 20. And historically, this week is a rough one for the S&P.
We’ve got October’s monthly option expiration coming up on Friday. On top of that, third-quarter earnings kick off tomorrow with reports from JPMorgan Chase & Co. (NYSE:JPM) and Charles Schwab Corp. (NYSE:SCHW) before the bell.
These are both catalysts that could send the market haywire, causing volatility to make wild swings in either direction, keeping our VIX light yellow today.
But with the start of earnings season comes a pretty big trading opportunity…
One that my colleague, Kenny Glick, is going to help you navigate.
He’s going live tomorrow at 9:30 AM ET to break down the morning’s first reports from the banks…
And to show you how to trade it.
October 12 2021