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Most Active Options Update: General Electric Company (GE)

General Electric Company puts are popular amid lukewarm price action

by 2/27/2014 1:57 PM
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The 20 stocks listed in the table below have attracted the highest total options volume during the past 10 trading days. Names highlighted are new to the list since the last time the study was run, and data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. One name of notable interest this afternoon is General Electric Company (NYSE:GE).


Put volume has accelerated on General Electric Company of late, per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Specifically, the stock's 10-day put/call volume ratio has risen to 0.39 from its Feb. 3 reading of 0.18. What's more telling of the growing interest toward GE puts, though, is that the current ratio is ranked in the 75th percentile of its annual range, meaning long puts have been initiated over calls at a faster-than-usual clip in recent weeks.

It's a trend witnessed in today's session, as well, where put volume is running at a 20% mark-up to average intraday levels. The most sought-after strike is GE's March 25 put, which has seen 6,715 contracts change hands. The majority of these positions have traded at the ask price, and implied volatility was higher at last check, suggesting buy-to-open activity.

By initiating these long puts, traders are betting on GE to retreat about 2% from its current perch in order to breach the strike price. Should the stock maintain its foothold atop $25 through the close on Friday, March 21 -- when front-month options expire -- the most the speculators stand to lose is the initial cash outlay. Although, as my colleague Milissa Hudepohl noted yesterday, premium on GE's short-term options is reasonably priced at the moment, from a volatility perspective.

Technically speaking, GE has had a lackluster start to 2014, and has shed about 9.1% year-to-date. More recently, the stock has been churning in a tight trading range between $25 and $26 since early February.

In today's session, General Electric Company (NYSE:GE) has tacked on 0.8% to hover near $25.50. Earlier, the diversified conglomerate announced it is putting its fuel dispenser unit on the market.


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