GM Long Options StrategyHeritage brands are making a comeback, as if they ever really went away. General Motors makes Buicks, Cadillacs, Chevrolets, GMCs as well as vehicles under the Holden, Baojun, and Wuling brands. Known for being reliable, they are a go-to for automotive-dependent businesses such as daily rental car companies, commercial fleet customers, leasing companies, and governments. Even though Detroit-based GM is more than a century old (founded in 1908), their newest offerings include safety and security services, automatic crash response, roadside/crisis/emergency assistance, navigation, remote control applications. They are also developing self-driving technology, and a highly anticipated electric pickup truck. Other areas of business are vehicle financing (through GM Financial) and subscription services in their app ecosystem. They also re-instated dividend payouts last year, adding to investor interest.
Technically, it has a couple of indicators going for it: a bullish flag, double bottom, some previous consolidation into a falling wedge. But that gap down... a good dip or a harbinger? And how to navigate this choppy stock market?
This protective options strategy makes up to 18% (12% annualized) and allows GM stock price to fall up to 22% (to below $27.98) before you start to lose any money.
Buy 1 $35 call
Sell 1 $40 call
Sell 1 $28 put
All expiring 6/21/24
Capital required: $2798