OptionsHouse

Options Trading News

November 27, 2012  Tue 10:41 AM CT

GE: SEE CHART GET CHAIN FIND STRATEGIES
General Electric has given up its morning gains, but a long-term trade is betting that further downside will be limited in coming years.

GE is up a penny to $21.07 after reaching a session high of $21.20. The stock bounced off support at $20 two weeks ago, its lowest level since the end of July, and hit a 52-week high above $23 at the start of October.

The biggest option trade in the name today is in the January 2015 18 puts. optionMONSTER's systems detected the sale of 5,000 of those puts for the bid price of $2.12, clearly a new position because the volume was twice the previous open interest.

The put selling is a bet that GE will be above $18 at expiration in more than two years. The trader is also making a bet that the implied volatility of the puts is greater than the future volatility of the stock.

The implied volatility of those puts is 27 percent, while the 30-day historical volatility for GE stock is 21 percent, a four-month high. It has not been above 27 percent since the first days of 2012.
Share this article with your friends


Related Stories

GE

Trade shows caution in General Electric

July 29, 2016

The conglomerate beat quarterly estimates on July 22 but fell because of weakness in industrial orders and other metrics.

GE

Puts hit General Electric ahead of results

July 19, 2016

The industrial giant has risen 7 percent in the last month, but a large position is showing caution before its earnings report at the end of this week.

GE

Show of support for General Electric

July 6, 2016

The industrial giant, which has risen 7 percent in the last week, is scheduled to announce quarterly results before the market opens on July 22.

OptionsHouse

Premium Services

Education & Strategy

Keep it simple

One of the appealing features about options trading is that different options can be combined to create a large variety of risk vs. reward profiles.

View more education articles »