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General Electric Company (NYSE:GE) put players are out in droves today, as roughly 38,000 puts -- more than two times the intraday norm -- have crossed the tape thus far. By comparison, 29,000 calls have been exchanged. Meanwhile, GE's shares have shaved off about 1% to trade at $24.07.
Many of today's put players have been drawn to the weekly 10/4 24 and 23.50 strikes, which have seen 6,285 and 5,272 contracts change hands, respectively. The contracts at the 24 strike crossed at a volume-weighted average price (VWAP) of $0.14, while those at the 23.50 strike traded for a VWAP of $0.02.
Nearly two-thirds of the contracts at each strike went off at the ask price, suggesting they were purchased. In addition, at each strike, implied volatility has ticked significantly higher, and volume exceeds current open interest levels -- collectively pointing to the initiation of long put positions.
In order for today's 24-strike put traders to earn a profit, GE has to fall just 21 cents, or 0.9%, to finish beneath the breakeven rail of $23.86 (strike minus VWAP) by this Friday's close, when the weekly options expire. Meanwhile, if the 23.50-strike traders are to see a profit by options expiration, GE has to drop at least 2.5% to land south of breakeven at $23.48, which sits in territory last explored on Sept. 9.
On the technical front, General Electric Company (NYSE:GE) has advanced roughly 15% year-to-date. Therefore, should the stock rebound from today's downturn, remaining atop the 24 and 23.50 strikes upon expiration, the most today's put players stand to lose is their initial premium paid per contract.
Of note, today's preference for puts over calls represents a change of pace in GE's options pits. In fact, just yesterday, options traders were picking up GE calls at a rapid-fire rate, possibly to bet on a strong earnings showing later this month.
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