GE, VIX and expected move

GE is not the same GE, VIX is the same VIX

GE is in the news lately for yet another potential scandal.  I am not sure where it ends up but the current state of the once-greatest industrial corporation in America is still a bit of a head scratcher.  VIX is the same in that every day we get some big move in volatility since any day could be a new Tweet and any Tweet is market moving vis a vis China and the Great Trade War.   In the old days GE did not move and VIX by nature did.  Now both are moving pretty well.

GE is either BK or on the mend, VIX to stay elevated

I am using GE as a parallel to VIX because the news any day causes large moves.  A famous short seller just said GE is doomed to implode, the CEO of GE says no.  The legendary investor Stan Druckenmiller says no too.  What that generates is big potential moves in the short term and giant potential moves in the longer term.  2 weeks ago, GE was trading $10.85 after earnings and hit $7 and change.  Potential current moves make GE anywhere sub-$7 to over $10.  Since VIX is a derivative volatility on the SPX, VIX itself can gyrate in the high teens and low-20 for a while.  It will take an extended period of no-Trade Tweets  to get us back to the 12 VIX of just a few weeks ago.

GE December options look cheap

With over 100 days to expiration, GE Dec20 6/10 strangle looks cheap to buy.  With EITHER bankruptcy or close to $11, a .50 strangle does not look too bad.  You could make a similar trade case for VIX in the Sep cycle.

GE options for Dec, Data from Cboe Livevol

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