We saw shares of General Motors leap to all-time highs Tuesday morning after the company revealed its new GM electric delivery van — and the possibility of flying cars.
Much like the cars of “Back to the Future” (if GM has anything to do with it), the company’s stock shot skyward. It rose nearly 9% to the highest it’s ever been at $48.95, topping its last record high of $46.76 back in 2017.
And by 2040, General Motors (NYSE: GM) could be worth trillions by reimagining the future with “personal air mobility.” The flying car will be designed for one person and will have the ability to travel over 50 mph while zooming over rooftops.
Just think about it: It’ll be like your own personal air taxi.
Thanks to all the wild news surrounding the new GM electric delivery van, we were able to capitalize on two credit spreads while our positions began to move up.
While we could never have seen today’s news coming, it gave us the chance to double our profits!
We initiated a bull put credit spread on GM with our 2-Click Profit members just before news of GM’s plans for flying cars and electric delivery vans broke.
There are a couple of reasons why we did this… From a technical standpoint (and after looking at the daily chart and 20-day simple moving average), we noticed implied volatility in GM was high — which is good. If you are a premium seller, then you know that higher volatility means higher premiums.
The other reason was the price was above the 20- and 50-day moving averages, and we saw a bounce forming after two days in the red. We made our first profits by using the down days to our advantage, and used the implied volatility to sell puts.
But we also saw large institutional call buying (even more so now after GM announced its new electric delivery van)… and if you combine that with a technical setup, you’re looking at a beautiful trading move.
Since you can only make what you sell the bull credit spread for, we now wanted more exposure to the long side of things. So we bought a bull credit spread on GM as well.
A move like this is called a bullish risk reversal — it’s similar to a synthetic long position and only profitable if the stock goes up a significant amount.
And thanks to news of the GM electric delivery van, our positions soared.
Watch the video below to learn step-by-step how we traded actionable news with our technical strategies.