General Electric (GE, $8.90, down $0.48) continues to set new 52-week lows after falling below $10 last week. Wow. It is really hard to believe this stock is in the single digits. The stock is getting so cheap to where it can be actually be traded but option traders are still loading up on the puts.
The March 7.50 puts (GEWOU, $0.55, up $0.10) have been pretty active as over 28,000 contracts have traded so far this morning. The put options opened at 30 cents, down 14 cents from Friday’s close as GE’s share price was higher to start the day. However, that has all changed as the Dow has given back all of its gains and is currently down about 80 points to 7,284.
You could buy the puts at current prices and look to exit them at 75 cents with a stop of 25 cents. Very high risk/ high reward trade…
The Dow Jones Industrial Average Index (DJX, $73.08, down $0.58) trades are still worth holding for the time being. The March 75 puts (DJXOW, $4.10, up $0.25) and the March 74 puts (DJXOV, $3.70, up $0.20) continue to do well as the Dow has dipped into negative territory. Consider placing stops at $3.85 on the March 75’s and $3.25 on the March 74 puts.