General Motors Delays Nikola Deal Amid Controversy

Sentiment surrounding GM has been bullish of late

Deputy Editor
Sep 30, 2020 at 11:03 AM
facebook X logo linkedin

The shares of General Motors Company (NYSE:GM) are pivoting higher, last seen up 2% to trade at $29.30 this morning, after the company said it is unlikely to close its $2 billion deal with Nikola (NKLA) before the end of Wednesday, though talks will continue between the two companies. This comes amid allegations of sexual abuse and fraud against Nikola's former executive chairman Trevor Milton. Just last week, Nikola named former vice-chairman of General Motors, Stephen Girsky, as Milton's replacement. 

While the stock pulled back in late September, following a six-month peak of $33.33 on Sept. 8, the 50-day moving average acted as a net on the charts, keeping GM at a six-month lead of over 53%. The security is still staring up at its 20-day moving average, however, which acted as a previous area of support before it gapped lower.  

Meanwhile, calls are dominating in the options pits. This is per GM's 50-day call/put volume ratio of 3.96 at the International Securities Exchange (ISE), Cboe Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than all but 8% of readings from the past 12 months, suggesting a healthier-than-usual appetite for long calls of late. Echoing this, General Motors stock's Schaeffer's put/call open interest ratio (SOIR) of 0.45 stands in the 9th percentile of its annual range. This suggests short-term option traders are unusually call-biased at the moment.  

Options look like the way to go if you're looking to get in on General Motor stock. In fact, GM's Schaeffer's Volatility Index of 44% stands higher than just 12% of readings in the past 12 months. This means options players are pricing in relatively low volatility expectations at the moment. 


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI