Options Players Wage on General Motors Company (GM)

Posted on 03/20/2013 by Jane Lacave

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NEW YORK (AVAFIN) -- General Motors Company options set a new 90-day record for the number of call contracts that exchanged hands between the buyers and the sellers. Aggregate volume of puts was 13,364 and calls was 54,164 equating to a 0.25 put/call ratio.

Put/Call ratio is often used to measure investor sentiment, the ratio serves as a predictor of investor behavior. A high put/call ratio suggests that the investor sentiment is bearish and that investors expect the underlying stock to decrease in value. In contrast, a low put/call ratio suggests that the investor sentiment is bullish and that the underlying stock is expected to increase in value. Unusual volume provides reliable clues that the stock is expected to make a move.

Models such as Buick's LaCrosse and Verano, the Cadillac ATS, and the Chevrolet Cruze have been very successful. GM can charge thousands of dollars more per vehicle in certain segments. Higher prices with fewer incentive dollars allow GM to get more margin per vehicle, which helps mitigate the severe decline in light-vehicle sales. Additionaly, Vehicles like the Cadillac ATS and Chevrolet's Malibu, Cruze, and Sonic show that GM can make a vehicle to compete directly with the models produced by Japanese and European automakers. GM already is a top player in critical emerging markets such as Brazil and China. It sells nearly 70% of its vehicles outside North America.

Shares of General Motors Company edged up $1.10 (+3.91%) to $29.20. The price of the stock ranged between a low of $28.19 and $29.30 respectively. The trading volume of 25M is above the 90 day average volume of 10M shares. GM is trading above the 50 day moving average. The stock's 52 week low is $18.72 and 52 week high is $30.68. To date, the stock has gained 14.18% within the last quarter.


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