GM's share buyback is driving options traders to the auto stock today
General Motors Co (NYSE:GM) stock is pacing the New York Stock Exchange (NYSE) today, last seen up 9.3% to trade at $31.58, on track for its best single-session gain since January 2021. The automaker this morning announced a $10 billion share buyback plan to go with a 33% dividend increase, while also reiterating its fiscal year 2023 guidance, a notable feat in the wake of the resolved United Auto Workers strike.
The news is giving sector peers Ford Motor Co (NYSE:F) and Stellantis NV (NYSE:STLA) a halo lift, with both stocks up 2.5% and 5.2% higher, respectively.
General Motors stock is set to clear its 80-day moving average for the first time on a closing basis since its Aug. 9 bear gap. GM is now down only 5.6% in 2023, but thanks to a 12.5% pop in November so far, the shares have distanced themselves from their Nov. 10 three-year bottom of $26.30.
Options bulls are out in force today, with over 182,000 calls crossing the tape at last check, volume that's quadruple the average intraday amount and pacing for the top percentile of its annual range. The weekly 12/1 32- and 33-strike calls are seeing new positions bought to open, while the December 29 call is also a popular contract today.
Premium traders are in luck, considering GM's Schaeffer's Volatility Scorecard (SVS) sits at 85 out of 100, suggesting the equity has exceeded option traders' volatility expectations in the last year.