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General Electric options just as bullish

General Electric options just as bullish

By Andrew Wilkinson

Heavy trading volume in shares of industrial conglomerate General Electric (Ticker: GE) caused its price to surge by 9.1% to $28.08 on Friday on news of further divestiture and a stock buyback program. Gains have accelerated in the afternoon following heavy option positioning earlier in the session. Some 225mm shares had traded by 2pm ET in comparison to typical volume of around 30mm. The share price jumped straight through the June high of $27.53 after call buying in the June series hinted of further gains. Some 49,000 call options have changed hands on Friday at the 29.0 strike price at an average premium of about 40-cents. The breakeven price for buyers of $29.40 implies a further gain for its shares of 4.7%, where the company last traded in April 2008. More recently, the stock peaked in December 2013 at $28.13 before arresting its decline at $23.41 in January. Before trading on Friday, investors held less than 3,000 open positions at the 29.0 strike for June expiration.

Chart – June 29 strike calls were the most actively traded contract as General Electric gains 9.1%

 

 

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