This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

GM: Can it Take the Driver's Seat?

Auto sales should finish last year, when the final numbers are all in, at a three-year high. With momentum on its side, auto industry sales are now poised be able to improve on last year's performance. If so, that would be highly welcome news for our industrial production and the stock market in general.

Believe it or not, General Motors (GM) is the U.S. sales leader in the auto industry with a market share of 19%. That is pretty good for a company that basically was coming "off the canvas" while "reeling on the ropes" only a few short years ago.

There's an old market truism related to sentiment about a stock that goes like this: It is hard for a cat to cozy up to a warm stove after being burned by a hot one! GM was a "hot stove" that singed many a GM believer, perhaps permanently. The "cats" are the fund managers who got singed. The warm stove is GM now, a new and improved version of what was once a great company and maybe will be so once again!

Regardless of any long-term positives possibly ahead for GM, the speculative approach to GM is now revving up. Seasonally the autos tend to be a good long side speculation at the beginning of any New Year. This year should offer that opportunity once again.

Let's review the T3/OP video with Jill and Scott as they walk through the charts for GM, F and the comment on the auto group:

Consider an options trade geared for playing GM to attempt to move up to higher prices in the short-term. The strategy I like for a GM options trade is the bullish vertical call spread, one that expires in June.

This trade is medium in risk because it is a controlled, while medium in potential reward because it is a hedged trade, a strategy that caps the profit.

Trades: Buy to open 3 GM June 20 calls for $2.30 and sell to open 3 GM June 25 calls at $0.60.

The total risk for the spread is the premium paid, or $1.70. As always, I will monitor the trade on this site in the comments section below.

OptionsProfits can be followed on Twitter at

T3Live can be followed on Twitter at

This complimentary article from Options Profits was originally published on January 3 at 8:40am EST. Don't risk missing over 40 options trade ideas every week and exclusive commentary from over 10 experts. Click here for more information.
At the time of publication, Skip Raschke, Jill Malandrino and Scott Redler held no positions in the stocks or issues mentioned.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
F $11.45 0.00%
GM $28.54 0.00%
AAPL $94.02 0.00%
FB $104.07 0.00%
GOOG $683.57 0.00%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Free Reports