Market Overview

Carter Worth And Mike Khouw's Bearish General Motors Trade

Share:

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

 

Related Articles (GM)

View Comments and Join the Discussion!

Posted-In: Carter Worth CNBC Mike Khouw Options ActionOptions Markets Media Trading Ideas