Ferrari's Shares Plummet 2.9% Amid Formula 1 Drama and Technical Divergence – What's Next?

Summary
• Ferrari (RACE) plunges 2.897% to $390.615, breaching key support levels
• Lewis Hamilton's Mexican GP absence confirmed, sparking investor anxiety
• RSI at 24.43 (oversold) clashes with bearish MACD divergence
• Options chain shows 52.22% price change in put options, signaling volatility

Today’s sharp selloff in Ferrari shares has sent shockwaves through the luxury automotive sector, driven by a confluence of Formula 1 team dynamics and technical indicators pointing to potential exhaustion. With Hamilton’s FP1 absence confirmed and the stock trading near its 52-week low of $372.31, the market is recalibrating its expectations for the Italian automaker’s performance trajectory.

Hamilton's Absence Sparks Investor Anxiety
The immediate catalyst for Ferrari’s selloff stems from Lewis Hamilton’s confirmed absence during the Mexican Grand Prix’s first practice session, with Antonio Fuoco stepping in as a rookie substitute. While this aligns with F1’s mandatory rookie participation rules, the news has triggered concerns about Hamilton’s long-term role at Ferrari. Investors are interpreting the move as a sign of instability in the team’s driver lineup, particularly as speculation grows about Charles Leclerc’s future and Hamilton’s performance relative to his $70 million contract. Compounding this, the stock’s technical profile shows a bearish divergence in the MACD histogram (0.86) despite a short-term bullish K-line pattern, suggesting a potential breakdown below critical support levels.

Options Playbook: Capitalizing on Volatility and Technical Divergence
• 200-day average: $462.07 (well above current price)
• RSI: 24.43 (oversold territory)
• MACD: -18.81 (negative divergence)
• Bollinger Bands: Current price ($390.615) near lower band ($334.04)

Top Options Contracts:
• RACE20251121P380 (Put):
- Strike: $380 | Expiry: 2025-11-21 | IV: 32.58% | Delta: -0.344 | Theta: -0.057 | Gamma: 0.0113 | Turnover: 112,302
- Leverage Ratio: 49.65% (high gearing)
- Price Change Ratio: 52.22% (volatility spike)
- Why it stands out: This put option offers aggressive downside exposure with a 49.65% leverage ratio, ideal for capitalizing on a potential breakdown below $380. The 32.58% implied volatility suggests strong bearish sentiment, while the 0.057 theta decay is manageable for a 21-day expiry.
- Payoff Calculation: At a 5% downside (target $371.13), payoff = max(0, $371.13 - $380) = $0. However, the 52.22% price change ratio implies significant gamma sensitivity to price swings.

• RACE20251121C390 (Call):
- Strike: $390 | Expiry: 2025-11-21 | IV: 35.17% | Delta: 0.535 | Theta: -0.546 | Gamma: 0.0113 | Turnover: 9,067
- Leverage Ratio: 26.38% (moderate gearing)
- Price Change Ratio: -35.04% (bearish bias)
- Why it stands out: This call option balances moderate leverage with high gamma (0.0113) for directional bets. The 35.17% IV and 0.535 delta position it as a speculative play if the stock rebounds above $390. The -35.04% price change ratio indicates strong bearish momentum, but the 26.38% leverage offers controlled exposure.
- Payoff Calculation: At a 5% downside (target $371.13), payoff = max(0, $371.13 - $390) = $0. However, the 35.17% IV suggests potential for volatility-driven gains if the stock stabilizes.

Trading Setup: The RSI at 24.43 and MACD divergence suggest a potential short-term rebound, but the 200-day average ($462.07) remains a critical resistance. Aggressive bears should target the RACE20251121P380 put if the stock breaks below $380, while cautious bulls might consider the RACE20251121C390 call as a volatility play. Monitor the 30-day support range ($406.30–$408.81) for potential reversal cues.

Backtest Ferrari Stock Performance

Act Now: Position for Breakdown or Rebound Amid Formula 1 Uncertainty
Ferrari’s selloff reflects a perfect storm of Formula 1 team dynamics and technical exhaustion. While the RSI at 24.43 hints at oversold conditions, the bearish MACD divergence and Bollinger Bands suggest a breakdown below $380 is imminent. Investors should prioritize the RACE20251121P380 put for aggressive downside exposure, given its 49.65% leverage ratio and 32.58% IV. Meanwhile, Tesla (TSLA), the sector leader, is up 0.25%, offering a contrasting narrative for risk-on trades. Watch for a breakdown below $380 or a rebound above $390 to dictate next steps—position accordingly.