Put Players Pile On General Electric Company (GE)

General Electric Company (NYSE:GE) announced plans to send jobs overseas, after the U.S. Export-Import Bank charter expired

by Karee Venema

Published on Sep 15, 2015 at 2:04 PM
Updated on Jun 24, 2020 at 10:16 AM

Just one day after General Electric Company (NYSE:GE) announced the consolidation of its software and IT units -- as well as a management shake-up at another division -- the blue chip said today it is shipping 500 jobs overseas, after Congress let the U.S. Export-Import Bank's charter expire. The financial firm offered GE's international customers roughly $11 billion in credit help last year. Separately, reports are circling GE may be in the market to scoop up parts of Halliburton Company's (NYSE:HAL) drilling business.

Whether it be the news or just a general bullish bias among the broader equities market, shares of GE are up 2.1% this afternoon at $25.28. However, the day's positive price action appears to be stalling out near the equity's year-to-date breakeven mark, located at $25.27.

The fact that today's upside is being capped is likely being met with cheers among option traders. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), GE's 10-day put/call volume ratio of 0.80 ranks in the 86th annual percentile. In other words, puts have been bought to open over calls at a faster-than-usual clip.

Echoing this is the security's Schaeffer's put/call open interest ratio (SOIR) of 1.01, which sits higher than 80% of all similar readings taken in the past year. Simply stated, short-term traders are more put-heavy now than usual toward GE. In fact, the two most active GE puts in the past 10 days have been the September 24 and 24.50 strikes.

Outside of the options pits, sentiment is more mixed. Among the brokerage bunch, six analysts maintain a "buy" or better rating, versus five "holds" and not a single "sell." Meanwhile, the average 12-month price target of $29.85 stands at an 18% premium to current trading levels.

Short sellers, however, have shown little to no interest in General Electric Company (NYSE:GE). Short interest declined 1.1% in the most recent reporting period, and now accounts for less than 1% of the stock's available float. At GE's average daily pace of trading, it would take just two sessions to cover these bearish bets.


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