Automaker Ford (F) has struggled in the past year, with shares down 25%. One trader sees further weakness through next summer.
That’s based on the June 2026 $10 puts. With 416 days until expiration, 5,093 contracts traded compared to a prior open interest of 222, for a 23-fold rise in volume on the trade. The buyer of the puts paid $1.61 to make the bearish bet.
Ford shares recently traded right at $10, making this an at-the-money trade. Ford has traded between $8.44 and $14.85 over the past year.
A slowing global economy and the rise of trade barriers and tariffs is likely to hold back auto sales overall. While Ford is a domestic producer, many of its parts come from overseas. Plus, rising reciprocal tariffs may impact overseas sales.
Ford shares look like a value play here, with the stock trading at 8 times forward earnings. However, those earnings could be subject to trend far lower.
Action to take: Investors should tread cautiously given the current economic uncertainty. Ford may be heavily impacted by today’s tariff fears, and shares may not have seen their low of the year just yet.
For traders, the June 2026 $10 puts have plenty of time to play out, and could see mid-double-digit returns or better if trade talks stall out. Traders may want to take quick profits rather than wait until expiration on the trade.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
