General Motors Plunges 7.45% Intraday: Can Tariff Headwinds Be Mitigated?

Summary
• GM shares nosedive 7.45% to $49.245 amid $1.1B tariff blow
• Q2 core profit drops 32% to $3B despite $4B-5B trade headwind warning
• Options chain sees 3269 contracts traded on 46-strike put ahead of 8/1 expiry

General Motors faces a seismic intraday selloff as Trump-era tariffs shave $1.1 billion off its operating income in Q2. With the stock trading at 9.3% of its 52-week high and 200-day MA at $49.93 acting as critical support, investors are scrambling to parse CEO Mary Barra’s optimism against tangible headwinds. The options market shows aggressive short-term positioning, with 46-strike puts leading volume as traders bet on continued weakness.

Tariff Shockwaves Disrupt Auto Sector Optimism
The 7.45% intraday selloff in GM stems directly from its Q2 earnings report revealing a $1.1 billion operating income reduction due to Trump’s tariffs. While CEO Mary Barra emphasized $4 billion in new U.S. plant investments and EV market gains, the immediate impact of $4B-5B in trade-related losses forced a 32% drop in core profit to $3 billion. The stock’s collapse to $49.07 (below 200D MA at $49.93) reflects investor skepticism about near-term mitigation strategies, despite Barra’s confidence in domestic battery production and ICE market positioning.

Options Playbook: Capitalizing on GM’s Volatility
• 200-day MA: $49.93 (below current price)
• RSI: 76.6 (overbought)
• Bollinger Bands: $47.88 (lower) to $55.45 (upper)
• MACD: 1.16 (bullish), signal line 1.13, histogram 0.04
• 200D support: $47.796–$48.1504

Key levels to watch: 1) 200D MA at $49.93 (critical resistance), 2) $48.15 (200D support), and 3) $46.50 (massive 3269-contract put volume). The 76.6 RSI suggests overbought conditions, but the 1.16 MACD histogram indicates lingering bullish momentum. With turnover at 2.62% of float, liquidity remains adequate for position building.

Top Options:
• GM20250801P46 (Put, $46 strike, 8/1 expiry):
- IV: 30.16% (moderate)
- LVR: 447.52%
- Delta: -0.090069 (moderate sensitivity)
- Theta: -0.005102 (time decay)
- Gamma: 0.063028 (price sensitivity)
- Turnover: 43,793
- Payoff at 5% downside (46.78): $0.78/share
- High leverage and liquidity make this ideal for a 5-7% downside play.

• GM20250801P47 (Put, $47 strike, 8/1 expiry):
- IV: 29.66% (reasonable)
- LVR: 205.11%
- Delta: -0.172399 (strong directional bias)
- Theta: -0.002620 (low time decay)
- Gamma: 0.100741 (high gamma)
- Turnover: 25,268
- Payoff at 5% downside (46.78): $0.22/share
- High gamma makes this contract responsive to price swings, ideal for volatility-driven strategies.

Aggressive bears may consider GM20250801P46 for a 7-9% downside target, while GM20250801P47 offers a more conservative play with high gamma for volatility capture.

Backtest general motors Stock Performance
General Motors (GM) has historically shown positive short-to-medium-term performance following a significant intraday plunge of -7%. The backtest data reveals that:1. Frequency and Win Rates: The event has occurred 578 times over the past five years, with a 3-day win rate of 54.67%, a 10-day win rate of 54.67%, and a 30-day win rate of 58.65%. This indicates a higher probability of a positive rebound in the immediate aftermath of such a significant drop.2. Returns: The average 3-day return following the event is 0.28%, with a maximum return of 4.67% on day 58. The 10-day return is slightly higher at 1.10%, with a maximum return of 5.8% on day 60. The 30-day return is 3.18%, with a maximum return of 7.5% on day 62.These results suggest that while there is some variability in the immediate post-plunge performance, GM tends to recover and even exceed its previous levels in the short to medium term. Investors might consider these findings when assessing the potential risks and rewards of trading around such events.

Tariff Turbulence: When Will GM’s Mitigation Pay Off?
GM’s 7.45% selloff highlights the immediate pain of Trump’s tariffs, but Barra’s $4B U.S. plant investments and EV market gains suggest long-term resilience. The 200D MA at $49.93 and $48.15 support zone will dictate near-term direction. With Ford (F) down 0.93% as a sector proxy, traders should monitor 46-strike put volume and 52W low at $38.96. Aggressive bears may target $46.50 (3269-contract level), but bulls need a retest of $51.37 (today’s open) to confirm a bounce. Watch for sector leader Ford’s performance to gauge broader auto sector sentiment.