General Electric Company (GE) Leads Dow Higher, Upsetting Option Bears

General Electric Company (GE) is surrounded by skeptics, who can't be too pleased about today's gains

by Alex Eppstein

Published on Sep 16, 2015 at 3:15 PM
Updated on Jun 24, 2020 at 10:16 AM

General Electric Company (NYSE:GE) is up 2.1% at $25.83, making it the top percentage gainer on the rallying Dow. The stock is getting a lift after Credit Suisse added it to its focus list, while the company is making headlines on a pair of transactions involving its GE Capital unit.

In today's options pits, calls are running at four times the expected intraday rate -- and more than quadruple the pace of puts. Longer term, though, traders have shown an unusually strong affinity for bearish bets over bullish. GE's 10-day put/call volume ratio across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is 0.72 -- in the 77th percentile of its annual range. In other words, traders have bought to open puts over calls at an accelerated clip over the last two weeks.

Echoing this, GE's Schaeffer's put/call open interest ratio (SOIR) checks in at 1.02. Not only does this reading indicate put open interest edges out call open interest among short-term strikes, it also ranks above 81% of comparable readings from the last 12 months.

The skepticism witnessed in General Electric Company's (NYSE:GE) options pits isn't totally unwarranted. Prior to today, the stock was barely above water, on a year-to-date basis. It's not in the clear yet, either. While GE has hurdled its 50-day moving average, its 80-day trendline is just overhead, threatening to short-circuit its momentum.

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