Carter Worth And Mike Khouw's General Motors Company Trade

, Mike Khouw and Carter Worth teamed up to make a bearish trade on

. Worth said that the stock hasn't made any progress recently and the rest of the market rallied. He added that the stock has been trading in a descending channel and he believes that it is going to trade lower to the bottom of the channel, which is at $20. Khouw thinks that it is hard to short the stock fundamentally, because it is trading in single digits when it comes to forward price to earnings. Instead of selling the stock short, he would sell a call spread. When the stock was trading at $29, Khouw wanted to sell the March 29 call for $1.40 and buy the March 31 call for $0.55, collecting $0.85. He explained that the stock closed higher on Friday and it is possible to sell the 30/32 call spread for roughly the same prices. With the trade, Khouw earns money if the stock stays at its current level or if it trades lower.