Learn the trade here. Make it on tradeMONSTER

Options Trading News

November 14, 2013  Thu 9:26 AM CT

GM: SEE CHART GET CHAIN FIND STRATEGIES
A huge call sale leads the early option action in General Motors as it comes off multi-year highs hit this morning.

optionMONSTER systems show that a single trade in the January 42 calls dominates heavy activity in the auto maker, with 30,000 of those contracts sold for $0.61. With volume that is almost 4 times the previous open interest at that strike, this is clearly a new position.

The calls weren't tied to any trading in the underlying shares identified by our scanners today, so it could be naked selling. That would have an initial bearish bias and significant risk if GM runs above $42.

But the options could also have been sold against an existing long position in a covered-call strategy, which would be bullish up to that strike but not beyond. (See our Education section)

GM is off 0.16 percent to $38.38 after hitting $38.80 this morning, its highest price since early 2011. Shares have been trending higher for the last year with a low below $24 last November. 
Share this article with your friends


Related Stories

GM

Cramer: We're back in bizarro world

July 28, 2014

Money managers need to see rates higher if they are going to trust the market, especially after those strong weekly unemployment claims and the durable-goods report last week.

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Free Webinars

Education & Strategy

How to navigate earnings season

We are embarking on one of the most frustrating times for new option traders: earnings season.Many new traders buy options,...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER