After a long spate of underperformance, General Electric could finally be set to rally, if some big options traders are right.
The stock fell 9 percent in 2014 even as the broader market surged, making it one of the worst Dow Jones industrial average stocks for the year (but not the absolute worst—that dubious distinction goes to IBM, which was the worst-performing Dow stock for the second year in a row).
It's done a bit better in the first two months of 2015—rising nearly 3 percent. But some options traders appear to think that the real rally is just getting started.
In a massive Friday trade, one trader (or firm, of course) bought 125,000 January 30/35 call spreads for about 50 cents per share. This is a $6.25 million bet that GE will rise about 35 percent, up to $35, by January 2017. And if it does, the trade will yield some $55 million in profit.