On Friday’s CNBC’s Options Action, the crew analyzed the performance of the auto sector. The auto sector has continued to move lower over the past few years despite record sales. Recently the sector has rallied over the past couple of weeks on very little news or fundamentals. Ford has bounced lower off its bearish trendline for almost 5 years, this recent rally provides an opportunity to sell. Expecting a move lower, Michael Khouw suggested selling a Oct 11/12 Call Spread for a $0.40 Credit.
We’ve structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience. You can also view the Options Action’s video by clicking on the following link: CNBC Options Action