Do options traders see a double for GE stock? Well, maybe not a double, but perhaps a gain of 40% by next year.
You may recall that back in January, options traders were furiously placing bearish bets on the demise of General Electric, the parent company of CNBC. They couldn't get enough of the Jan 10 2.5-strike puts, gobbling them up as if it were a sure bet.
GE stock never did get there, but it got way too close for many investors, briefly dipping below $6 at one point, before rally back up to $16.
Now, the opposite appears to be the case. In a massive trade hitting the tape today, nearly 145,000 contracts of the Jan 11 22.5-strike calls traded hands. At $0.75 a piece, this trade won't payoff unless GE stock is above $23.25 by January expiration in 2011.
Let's hope options traders are two for two.
- GE Capital Losses May See Dramatic Fall: JP Morgan
- GE-Vivendi Talks Over NBC Universal Stalled: Report
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