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Since touching a four-year high of $24.95 on July 19, General Electric Company (NYSE:GE) has backpedaled about 4.9% to $23.72. Nevertheless, option traders are gambling on a bounce for the blue chip, which has seen accelerated call volume in the last couple of weeks.
On the International Securities Exchange (ISE), traders have bought to open more than 15,000 GE calls and just 515 puts during the past five sessions, resulting in a call/put volume ratio of 29.15. Broadening that to include data from the Chicago Board Options Exchange (CBOE) and NASDAQ OMX PHLX (PHLX), the stock sports a 10-day call/put volume ratio of 7.01. This ratio sits just 2 percentage points from a 12-month peak, suggesting option buyers have picked up GE calls over puts at a near-annual-high clip recently.
As a result of the growing affinity for GE calls, the stock's Schaeffer's put/call open interest ratio (SOIR) now rests at 0.65 -- just 10 percentage points from a 52-week low. Or, in simpler terms, near-term option traders are more call-skewed than usual right now.
In the front-month series, the out-of-the-money September 25 strike is home to peak call open interest of more than 77,000 contracts outstanding. The September 24 call is quickly gaining traction, though, with more than 8,000 contracts added during the past two weeks. This strike now harbors open interest of more than 57,200 calls outstanding. The 24 and 25 strikes are also most popular in the October series of options, with about 8,000 and 9,000 contracts added, respectively, over the past 10 sessions.
Outside of the options pits, analysts also remain optimistic when it comes to GE. The stock boasts six "strong buys" and one "buy" rating, compared to four lukewarm "holds" and not a single "sell" or worse suggestion.
As alluded to earlier, GE has lost some steam on the charts in recent weeks, pressured lower beneath its 10-day moving average. However, the shares are still trading north of their 32-week moving average, which has acted as a springboard higher since late 2011.