OptionsHouse

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

GM attracts bullish earnings plays

July 16, 2015

The auto maker has fallen 15 percent in the last three months, but traders apparently believe that it will report positive quarterly results next week.

GM

Traders bet GM will get back in gear

July 13, 2015

The auto maker has taken a beating amid vehicle recalls and worries about slow demand in China, but business has been improving in the United States.

Invest Like a Monster - San Antonio: October 9-10

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Archived Webinar

Education & Strategy

Options Academy: Put/Call Parity

Once you have learned and understood the concepts of Synthetic Positions and Reversal/Conversion, you have mastered the idea that options are truly mathematically based...

View more education articles »