$F has been constantly rejected from the $20, Noticing that as soon as bid hits $19.99 there are sudden sell orders that come up on the market depth to the magnitude of 250k+ shares. I believe that a financial institution has an interest in keeping the price below $20 for the rest of this week as there are 115k $20 11/19 C options currently in OI that are yet to be ITM. In contrast the OI for $20C for 11/26 is currently only at 13k.
My idea, is that after this week we will see Ford run barring any large negative macroeconomic events/news.
Will be looking to enter 11/26 expiry calls towards the end of this week if F continues to bounce of the $20 level.
Interesting, how do the premiums move on the Puts for next week, are they cheap are they pricey? Do the calls next week move bigger in comparison to the weeklies? Sometimes I use that as my indicator for the options writer’s sentiments. I used this to determine how TSLA was going to react next when it first broke the $1000 level and hadn’t reached $1100+ yet, the next week’s premium went from something like 11 to 40+, an out-of-proportionately huge move, which indicated to me that they think TSLA can reach $1100+, and evidently it did the following days. I keep it simple as rarely everything in your life goes perfect so why would all your technicals (if you were to have alot) So because of that I actually like the direction of this analysis but need a little more information.
First, whenever a stock is pushing up to a resistance level for awhile, it is natural for the highest OI to accumulate on the OTM strike immediately above. In Ford’s case, it’s been at this level for several days and naturally the highest OI should be at $20. I’m not saying that your theory is wrong, but instead I’m pointing out a reason why the OIs are there.
Secondly, while I tend to agree with your theory and it does falls in line with max pain theory, your theory does not account for the OI on the put side. If there is such a force (market maker perhaps) that is trying to keep the price at a certain point, it would be closer to actual max pain which is at $17 currently.
Thanks for that insight kryptek, im planning to enter into calls at the end of the week if it continues to not break the $20 resistance in intraday trading.
