General Electric Stock Rises After CEO Extension

GE has spent the last two months trading in a tight range

Deputy Editor
Aug 21, 2020 at 10:07 AM
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The shares of General Electric Company (NYSE:GE) are up 1.5% at $6.37 this morning, after the company extended CEO Larry Culp's contract through August 2024. Culp, who stepped into the role in 2018, was also given a newly approved performance-based stock grant.

When we last checked in on General Electric stock, the company stumbled after reporting wider-than-expected second-quarter losses. Since then, GE has traded sideways between the $6 - $7.25 region, with their 100-day moving averages containing breakouts the last two months. Year-to-date, the equity has taken a 43% haircut.

Nevertheless, calls remain incredibly popular. General Electric stock's 10-day call/put volume ratio of 7.35 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), sits in the highest percentile of readings from the past year. This indicates that there is a much healthier-than-usual appetite for calls of late. 

The good news is that, GE also sports a Schaeffer’s Volatility Index (SVI) of 48%, which sits in the 18th percentile of its annual range. This suggests options have been pricing in relatively low volatility expectations right now, a boon for premium buyers.

 

 

 

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