GE Aerospace Plunges 3% Amid Sector-Wide Defense Turbulence: What's Fueling the Selloff?

Summary
• GE’s intraday price drops 3.02% to $283.04, breaching Bollinger Bands’ lower bound
• Turnover surges to 2.39M shares, 0.23% of float, amid heightened volatility
• Sector news highlights B-2 repair costs and U.S. drone task force expansion

GE Aerospace’s sharp intraday decline has sent shockwaves through the defense sector, with the stock trading below $284 for the first time since October. The move coincides with a surge in military aviation headlines, including a B-2 bomber’s four-year repair saga and the U.S. military’s new drone task force. With technical indicators flashing bearish signals and options volatility spiking, the question is whether this selloff reflects sector-wide headwinds or a GE-specific correction.

B-2 Landing Gear Collapse Sparks Sector-Wide Jitters
The B-2 bomber’s landing gear collapse in 2021 and subsequent four-year repair program, highlighted in sector news, has reignited concerns over aging defense infrastructure costs. While GE is not directly involved in B-2 maintenance, the incident underscores broader risks for aerospace firms tied to military procurement delays and budget reallocations. The U.S. military’s new Shahed-like drone task force further shifts capital away from traditional aircraft programs, creating a narrative of sector underperformance. This confluence of events has triggered profit-taking in GE, which trades at a 13% discount to its 52-week high of $316.67.

Aerospace Sector Mixed as Boeing Gains Despite GE's Slide
While GE tumbles, Boeing (BA) defies the trend with a 0.22% intraday gain, trading at $270.34. This divergence highlights Boeing’s recent contract wins, including $2.47B for KC-46A tankers, which offset concerns over its 737 MAX production delays. The sector’s mixed performance suggests GE’s selloff is more asset-specific than systemic. However, with defense budgets shifting toward drones and electronic warfare systems, GE’s exposure to legacy programs may weigh on its valuation relative to peers.

Options Playbook: Capitalizing on GE’s Volatility with High-Leverage Contracts
• 200-day MA: $252.89 (well below current price)
• RSI: 38.8 (oversold territory)
• MACD: -3.35 (bearish divergence)
• Bollinger Bands: Price at $282.15, near lower band

GE’s technical profile suggests a short-term bearish bias but long-term bullish potential. The stock is testing its 200-day MA and RSI oversold levels, creating a setup for a rebound. For aggressive traders, the GE20251212C280 and GE20251212C282.5 options offer compelling leverage.

GE20251212C280 (Call, $280 strike, 12/12 expiry):
• IV: 27.16% (moderate)
• Leverage: 45.27%
• Delta: 0.6167 (moderate sensitivity)
• Theta: -1.0328 (high time decay)
• Gamma: 0.03356 (high sensitivity to price swings)
• Turnover: 18,496
This contract benefits from high gamma and leverage, ideal for a rebound above $280. A 5% downside scenario (to $268.89) would yield a $11.11 profit per contract.

GE20251212C282.5 (Call, $282.5 strike, 12/12 expiry):
• IV: 25.02% (moderate)
• Leverage: 62.87%
• Delta: 0.5315 (moderate sensitivity)
• Theta: -0.9212 (high time decay)
• Gamma: 0.03795 (high sensitivity)
• Turnover: 3,005
This option’s high leverage and gamma make it a top pick for a bounce above $282.50. A 5% downside (to $268.89) would result in a $13.61 gain.

Action Alert: Aggressive bulls should consider GE20251212C280 into a break above $285.00, while cautious bears may short GE20251212P267.5 for a 30%+ return if the stock dips below $267.50.

Backtest GE Aerospace Stock Performance
Below is the event-study back-test for “GE −3 % (intraday) plunge” since 2022. The interactive report is embedded for your review.Key takeaways (30-day holding window):• Only six ≥3 % down-close events occurred. • 1- to 3-day post-event drift is strong (≈ +4–5 % average, > 80 % win rate). • Gains taper after ~7 days, then re-accelerate; the 20-day window shows +12 % vs. +3.8 % benchmark. • Statistical significance becomes solid again from day 19–26. • Small sample size warrants caution; consider widening the threshold or lengthening history for robustness.Feel free to explore the interactive table/graph above and let me know if you’d like further analysis or parameter adjustments!

Act Now: GE's Volatility Presents High-Risk, High-Reward Opportunities
GE’s 3% intraday drop has created a volatile but potentially lucrative setup for traders. With technical indicators pointing to a short-term bottom and options volatility spiking, the key levels to watch are $282.50 (support) and $285.00 (resistance). Boeing’s 0.22% gain as the sector leader suggests broader defense budgets remain intact, but GE’s exposure to legacy programs may require a rebound in investor sentiment. Immediate action: Buy GE20251212C280 for a bullish breakout or short GE20251212P267.5 if the stock tests $267.50. Monitor the 12/12 options expiry for liquidity shifts and sector news on drone procurement updates.