Sarah Wasserman (swasserman@sir-inc.com) General Motors Company (GM) has been on a roll the past few weeks. Since its November IPO, the stock had been idling in a trading range between the $33.50 to $33.50 levels; however, last week, GM staged a rally. In fact, on Thursday the auto issue hit a new high of $36.98.
The automaker caught option players' attention on Thursday, with roughly 73,000 contracts crossing the tape on the session -- nearly double GM's expected daily option volume. Calls were especially hot, with some 57,000 of these bullishly oriented options changing hands.
GM's January 2011 35 call was a popular choice on Thursday, with nearly 5,500 contracts changing hands -- 84% of which traded at the bid price, suggesting that they were likely sold. Open interest at this strike fell substantially overnight, confirming that a portion of these calls were likely liquidated. With GM hovering just shy of the $37 level, these 35-strike calls are comfortably in the money.
In fact, call players are likely cheering GM's recent rally, as the 35 strike is home to peak front-month call open interest of 47,416 contracts. Meanwhile, peak put open interest of just over 13,700 contracts can be found at GM's 32 strike -- which is deeply out of the money.
GM closed at $36.82 on Thursday.
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