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Sidewinder Update: General Electric (NYSE: GE)

Posted
2/12/2010 2:48:00 PM
By: Karla Yeh
Referenced Stocks:GE

At 9:37 a.m. EST, an investor put on a bear put spread in General Electric Co. (NYSE: GE ), selling the June 11 puts to buy the June 15 puts 5,000 times for a net debit of 89 cents per spread . This is a moderately bearish strategy that turns profits if GE shares close lower than $11 at June options expiration. This put spread buyer is also protected if GE shares climb higher than $15, however, and will incur a maximum risk of the premium paid (89 cents per spread). Implied volatility of the June 11 puts is 47, while implied volatility of the June 15 puts is 34. GE shares declined 36 cents, or more than 2%, to $15.41 out of the gate. The company announced production of a new handheld ultrasound machine this morning.