Wednesday, April 20, 2011

Call Buyers Flock to General Electric Ahead of Earnings (GE)

This came out late yesterday, today the stock is up 1.33% at $20.54.
From Schaeffer's Research:
General Electric (GE - 20.30) will follow its fellow blue chips into the earnings spotlight before the opening bell on Thursday, April 21. From an historical standpoint, the big-cap conglomerate has bested the Street's per-share earnings estimates in each of the past four quarters, Thomson Reuters reports, and it appears more than a few options players are employing weekly options to roll the dice on another solid earnings showing.

So far today, GE has seen about 62,000 calls cross the tape -- nearly twice the number of GE puts exchanged. About a third of the volume has centered on the stock's at-the-money weekly 20-strike call, which expires this Thursday -- the same day as GE's earnings unveiling. With fewer than 15,000 calls currently docked at this very short-term strike, and considering the majority of the contracts have changed hands at the ask price, it seems speculators are buying the weekly calls to open today....MORE