OptionsHouse

Options Trading News

January 9, 2013  Wed 2:45 AM CT

GM: SEE CHART GET CHAIN FIND STRATEGIES
A large trader is selling calls in General Motors as its shares slip from recent highs.

More than 7,500 January 2014 37 calls were sold yesterday, with prints of 3,197 and 4,000 going for $1.03 and $1.02 respectively, according to optionMONSTER systems. This is a new position, as the previous open interest at that strike was just 121 contracts.

The calls may have been sold naked in a bet that GM won't be trading above $37 by that expiration. The delta of the options is just 0.23, suggesting a 23 percent probability that the stock will be above the strike price at that time.

The calls could also have been traded against an existing stock position in a covered call strategy, which would be bullish up to the strike price but not beyond. (See our Education section)

GM was down 0.98 percent to $29.37 at the end of the day. The auto maker finished Friday at $29.86, its highest close in about 18 months. Shares were at a 52-week low of $18.72 in July.
Share this article with your friends


Related Stories

GM

Trades show caution in General Motors

May 19, 2016

The auto maker reported bullish results in April and is up 6 percent in the last three months, but traders are looking at a possible pullback.

OptionsHouse

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Education & Strategy

Timing the Trade

Both break outs and a break downs need to have a couple things happen before it is considered a confirmed break out or break down by technical definition!  The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

View more education articles »