Carter Worth And Mike Khouw's Bearish General Motors Trade

On CNBC's Options Action, Carter Worth shared with the audience his bearish view on the auto industry and General Motors Company GM.

He said that the U.S. vehicles sales has topped right at its highs from 2000 and he sees that as a very bad sign. The global auto index had a poor relative strength versus the S&P 500 in the last three years, which means investors would have done better investing in other S&P 500 stocks.

Worth explained that General Motors is currently trading at its support line and he thinks it's going to break on the downside and drop to $30.

Mike Khouw suggested a bearish options strategy in General Motors. He wants to buy the June 33/30 put spread for $0.80. The trade breaks even at $32.20 or 4.59 percent lower and it can maximally make a profit of $2.20.