GE Aerospace Plunges 2.64% Amid Sector-Wide Turbulence: What's Fueling the Selloff?

Summary
• GE Aerospace (GE) trades at $268.93, down 2.64% from its 52-week high of $277.00
• Intraday range spans $268.62 to $277.00, with turnover hitting 1.67 million shares
• Sector peers like RTX (RTX) also underperform, down 0.78% as defense spending debates intensify

Today’s sharp selloff in GE Aerospace reflects broader aerospace sector jitters amid mixed signals from defense procurement updates and production disruptions. With the stock trading near its 52-week low of $159.36, investors are scrambling to parse the implications of recent military contract awards and labor strikes at key suppliers.

Boeing Strike and Military Contract Delays Spur GE Aerospace Sell-Off
The selloff in GE Aerospace is directly tied to the Boeing defense workers’ strike in St. Louis, which threatens production timelines for critical programs like the F-15EX Eagle II. As a key supplier of propulsion systems and avionics for Boeing’s defense platforms, GE faces indirect exposure to production bottlenecks. Meanwhile, the Pentagon’s recent $5.4 billion funding shift toward precision strike and space programs has created uncertainty about near-term demand for traditional aerospace hardware. Sector-wide, the 0.78% decline in RTX (Raytheon Technologies) underscores investor skepticism about defense budgets amid fiscal year 2026 spending negotiations.

Aerospace Sector Volatility Intensifies as RTX Trails GE's Slide
While GE’s -2.64% drop outpaces the sector’s broader decline, RTX’s -0.78% move highlights shared headwinds. Recent sector news, including Boeing’s SATCOM satellite contract and Joby Aviation’s eVTOL advancements, has created a bifurcated market. Defense contractors reliant on legacy programs (like GE) face downward pressure, while commercial aerospace innovators see limited upside. The sector’s 35.58 P/E ratio remains elevated, but earnings visibility is clouded by production delays and shifting procurement priorities.

Options Playbook: Capitalizing on GE's Volatility with Strategic Contracts
• MACD: 6.77 (above signal line 6.50), RSI: 63.50 (neutral), Bollinger Bands: $247.97–$279.82 (current price near lower band)
• 200-day MA: $206.09 (well below current price), 30-day MA: $259.22 (resistance ahead)

Key levels to watch: 267.50 (Bollinger lower band) and 277.00 (intraday high). Short-term volatility is likely to persist as defense spending debates and production strikes dominate headlines. The options chain reveals two high-conviction plays:

• GE20250815C270 (Call, $270 strike, 8/15 expiry):
- IV: 27.22% (moderate), Leverage: 56.07%, Delta: 0.49, Theta: -0.66, Gamma: 0.031
- Turnover: 696,698 (liquid), Price Change: -47.71%
- This contract offers a balanced risk-reward profile. With a delta near 0.5, it benefits from a rebound above $270 while moderate IV ensures cost efficiency. Theta decay (-0.66) suggests time sensitivity, ideal for a short-term breakout play.

• GE20250815C272.5 (Call, $272.50 strike, 8/15 expiry):
- IV: 27.24% (moderate), Leverage: 72.35%, Delta: 0.41, Theta: -0.59, Gamma: 0.030
- Turnover: 17,203 (liquid), Price Change: -54.07%
- This high-leverage contract thrives on a sharp rebound. The 72% leverage ratio amplifies gains if GE breaks above $272.50, while gamma (0.030) ensures responsiveness to price swings. Ideal for aggressive bulls betting on a post-strike recovery.

Payoff Estimation: A 5% downside to $255.48 would render both calls worthless, but a 5% upside to $282.37 could yield 12–15% gains on the 270/272.50 strikes. Aggressive bulls should target a break above $277.00; short-side traders may consider the 270 put (GE20250815P270) if support at $267.50 fails.

Backtest GE Aerospace Stock Performance
The backtest of GE's performance after an intraday plunge of -3% shows a significant decline in the strategy's returns. 1. Intraday Plunge: The stock experienced a notable intraday drop of -3%, which is a significant volatility event.2. Post-Plunge Performance: Following the intraday plunge, the stock's performance was severely impacted. Backtesting reveals a substantial decrease in overall returns, indicating that holding the stock after such a drop was detrimental to the investment strategy.This highlights the importance of managing risk and closely monitoring market volatility, as significant intraday events can lead to substantial impacts on long-term returns.

Act Now: GE's Volatility Presents High-Risk, High-Reward Opportunities
GE’s sharp decline reflects near-term sector headwinds but also creates asymmetric options opportunities. With the stock trading near its 52-week low and key support at $267.50, the path forward hinges on production strike resolutions and defense spending clarity. RTX’s -0.78% decline underscores sector-wide caution, but GE’s technicals suggest a potential rebound if buyers step in above $270. Investors should prioritize liquidity and leverage ratios in options selection while monitoring the 8/15 expiry for catalysts. Watch for a $277.00 breakout or a breakdown below $267.50 to dictate next steps.