Tony Zhang's General Motors Trade

Tony Zhang recommended a long position in General Motors Co. (NYSE: GM) this past Friday on CNBC's "Options Action". He wants to take a look past the noise regarding the Nikola Corp. (NASDAQ: NKLA) and focus on General Motors' investments for the future. He doesn't see rumors about Nikola Corporation as the long term negative for GM's business.

The stock has underperformed the market for multiple years, but it recently broke out its resistance level at $30, said Zhang. After the break out GM dropped back to $30 and the fact it held this level Zhang finds attractive for a long opportunity.

He wants to exploit high implied volatility in the name and sell the October $30 put for $1.55. The trade breaks even at $28.45 or 6.6% below the closing price on Friday.