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Most Active Options Update: General Motors Company (GM)

General Motors Company option traders bet on additional struggles through week's end

by 1/13/2014 2:49 PM
Stocks quoted in this article:

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 Motors Company (NYSE:GM).

Most

Put volume has picked up in General Motors Company's options pits today, with the contracts trading at a 56% mark-up to typical intraday levels. Eight of the top 10 most active contracts expire at this Friday's close, and the January 2014 40-strike put has taken the prize as the most popular option thus far. Nearly all of the 8,715 puts traded here have done so on the ask side, and implied volatility has jumped 3.9 percentage points, hinting at buy-to-open activity.

The at-the-money puts were purchased for a volume-weighted average price (VWAP) of $0.49 apiece, making breakeven $39.51 (strike less the VWAP), or 1% below GM's current perch at $39.90. Meanwhile, it's a coin toss as to whether or not this put will be in the money at Friday's close -- when front-month options expire -- according to its delta of negative 0.52, or 52%.

On the charts, General Motors has advanced roughly 31% year-over-year. However, since hitting a post-bankruptcy peak of $41.85 in late December, the stock has spent time consolidating around its 40-day moving average, currently located at $39.76. This trendline provided a foothold for GM in early November, and could once again serve as support, should the stock continue its recent pullback.

In today's session, General Motors Company (NYSE:GM) has given back about 0.3%, despite a number of upbeat headlines that emerged from the North American International Auto Show over the weekend. Specifically, incoming CEO Mary Barra introduced GM's newest product, the automaker took top billing for both the 2014 North American Car and Truck of the Year, and Chief Financial Officer Dan Ammann speculated that a dividend could be on the horizon.


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