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Special Coverage GM: Top Traders Plays on GM IPO

Wednesday, 17 Nov 2010 | 6:39 PM ET

We know what you want most from the Fast Money gang. Following is a compilation of our best GM related trades.

How should you position? What should you be watching?

Instant Insights with the Fast Money traders

optionMONSTER Jon Najarian thinks anybody who gets into it GM on Wednesday should flip it quickly. He says at $33 there will likely be $2-$3 dollars of upside as "investors take profits like a thief in the night and run." But he adds the introduction of GM options could put a floor under this stock if investors buy put protection.

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Joe Terranova of Virtus thinks, on a valuation basis, GM at $33 is relatively cheap. He argues there will be demand for the stock on both fundamentals and on expectations GM will be added to the S&P 500 in the months to come. "Even if it pulls back immediately after the IPO as specualtion suggests I just can’t imagine the stock trades below $26," he says.

Pete Najarian, also of optionMONSTER.com, says he thinks there's "no doubt" the stock will pop on its first day of trading Thursday. What remains to be seen, however, is whether GM will be able to maintain those gains three months from now. For that reason, he isn't sure GM is a long-term play.

Word on the Street
The Fast Money traders take a look at today's top business stories.

If you're set on playing GM, Patty Edwards of Trutina Financial thinks there's a trade in there somewhere. Edwards prefers Ford, though, because of CEO Alan Mulally's leadership style. She credits Mulally with Ford's recent success.

Speaking of Ford, Todd Gordon of FOREX.com noted the stock has seen a 21 percent gain in the past month. Gordon puts resistance at the $18 level. From a valuation standpoint, he thinks Ford's valued slightly ahead of where GM should IPO Thursday. For that reason, he anticipates profit-taking at that $18 level.

Elsewhere in the auto space, Edwards likes Tata Motors and AutoZone on the GM IPO.

Veracruz founder Steve Cortes recommends auto suppliers TRW Automotive and Magna International .

On Monday's Fast Money Brian Kelly suggested a pairs trade; long GM and short Toyota.

Tim Seymour is more interested in playing the auto space globally with Fiat , Daimler , Renault or Peugeot , he says.




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Trader disclosure: On November 17, 2010, the day this video was recorded, following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Finerman owns (AAPL); Finerman’s firm owns (GM); Finerman owns (DYN); Finerman's Firm Is Short (IWM); Finerman's Firm Is Short (SPY); Finerman's Firm Is Short (MDY); Finerman's Firm Is Short (IJR); Finerman's Firm Is Long Russell Puts; Finerman's Firm Is Long S&P Puts; Jon Najarian owns (DRYS); Jon Najarian owns (FSLR) put spread; Jon Najarian owns (LMD) calls; Jon Najarian owns (FIRE) calls; Grasso owns (ASTM), (BA), (BAC), (BWC), (C), (CSCO), (JPM), (LPX), (MOT), (MHY), (NDAQ), (PFE), (PRST); Terranova owns (UPL), (C), (PEP), (VRTS), (OXY), (GS), (POT), (AAPL), (ORCL), (MCD), (NKE)

For Steve Grasso:
Stuart Frankel & Co and it’s partners own (AAPL)
Stuart Frankel & Co and it’s partners own (CSCO)
Stuart Frankel & Co and it’s partners own (CUBA)
Stuart Frankel & Co and it’s partners own (GERN)
Stuart Frankel & Co and it’s partners own (HSPO)
Stuart Frankel & Co and it’s partners own (NWS.A)
Stuart Frankel & Co and it’s partners own (NYX)
Stuart Frankel & Co and it’s partners own (PDE)
Stuart Frankel & Co and it’s partners own (PFE)
Stuart Frankel & Co and it’s partners own (PRST)
Stuart Frankel & Co and it’s partners own (RDC)
Stuart Frankel & Co and it’s partners own (TLM)
Stuart Frankel & Co and it’s partners own (XRX)
Stuart Frankel & Co and it’s partners own (SDS)
Stuart Frankel & Co And Its Partners Own (UNM)
Stuart Frankel & Co and it’s partners are short (QQQQ)
Stuart Frankel & Co and it’s partners are short (MCD)
Stuart Frankel & Co and it’s partners are short (AAPL)

For Joe Terranova
Terranova is chief market strategist of Virtus Investment Partners, LTD.
Virtus Investment Partners own more than 1% of (ABAX)
Virtus Investment Partners own more than 1% of (ALK)
Virtus Investment Partners own more than 1% of (AMKR)
Virtus Investment Partners own more than 1% of (CASS)
Virtus Investment Partners own more than 1% of (CMS)
Virtus Investment Partners own more than 1% of (CSC)
Virtus Investment Partners own more than 1% of (CSVI)
Virtus Investment Partners own more than 1% of (FCFS)
Virtus Investment Partners own more than 1% of (IGE)
Virtus Investment Partners own more than 1% of (LDR)
Virtus Investment Partners own more than 1% of (LPHI)
Virtus Investment Partners own more than 1% of (MGRC)
Virtus Investment Partners own more than 1% of (NRCI)
Virtus Investment Partners own more than 1% of (DBV)
Virtus Investment Partners own more than 1% of (XLB)
Virtus Investment Partners own more than 1% of (XLP)
Virtus Investment Partners own more than 1% of (XLY)
Virtus Investment Partners own more than 1% of (XLF)
Virtus Investment Partners own more than 1% of (XLI)
Virtus Investment Partners own more than 1% of (XLU)
Virtus Investment Partners own more than 1% of (SOA)
Virtus Investment Partners own more than 1% of (SUBK)
Virtus Investment Partners own more than 1% of (WDFC)
Virtus Investment Partners own more than 1% of (WMB)
Virtus Investment Partners own more than 1% of (YDNT)
Virtus Investment Partners own more than 1% of (DRYS)

For Brian Kelly
Accounts Managed By Kanundrum Capital Own (C)
Accounts Managed By Kanundrum Capital Own (GLD)
Accounts Managed By Kanundrum Capital Own (SLV)
Accounts Managed By Kanundrum Capital Own (IEF)
Accounts Managed By Kanundrum Capital Own (TIP)
Accounts Managed By Kanundrum Capital Own (REE)
Accounts Managed By Kanundrum Capital Own (GDXJ)
Accounts Managed By Kanundrum Capital Own (HD)
Accounts Managed By Kanundrum Capital Are Long Euro
Accounts Managed By Kanundrum Capital Are Short (YEN)

For Mike Khouw
***No Disclosures***

CNBC.com with wires.

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  • Finerman is president of Metropolitan Capital Advisors, Inc., a company she co-founded.

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  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

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