General Motors Surges 2.68% Amid $1.6 Billion EV Write-Down: A Contrarian Play?

Summary
• General Motors (GM) surges 2.68% intraday to $57.11, defying a $1.6 billion EV-related impairment charge.
• Sector leader Ford (F) trails with 1.41% gains, while GM’s 52W high of $62.14 looms as a critical resistance.
• Options frenzy: 2025-10-24 call options on $56–$58 strikes see 86k+ turnover, signaling bullish positioning.

General Motors’ stock is staging a sharp rebound amid a $1.6 billion blow from U.S. policy shifts, with traders betting on a rebound in EV demand or a pivot to ICE. The stock’s 2.68% rally to $57.11—despite a $1.2 billion non-cash impairment—highlights market skepticism toward the administration’s pro-gas agenda and optimism over GM’s retail EV lineup.

EV Policy Shifts Spark GM's $1.6 Billion Write-Down and Intraday Rally
The U.S. government’s abrupt termination of the $7,500 EV tax credit and relaxed emissions rules forced GM to book $1.2 billion in non-cash impairments and $400 million in contract cancellation fees. While the news initially pressured shares, traders interpreted the move as a short-term overreaction. The market is betting GM’s retail EV portfolio—Chevrolet Bolt, Cadillac Lyriq—remains viable, with production cuts seen as temporary adjustments rather than a strategic retreat. Additionally, the $1.6 billion charge is largely non-cash, preserving liquidity and operational flexibility.

Automotive Sector Volatility as EV Transition Uncertainty Lingers
The automotive sector is split between EV optimism and ICE pragmatism. Ford (F) trails GM with 1.41% gains, having taken a $1.9 billion EV charge last year. Meanwhile, Chinese EV giant BYD’s 31% YTD sales growth underscores global demand shifts. GM’s 52W low of $41.60 contrasts with its 5.2x dynamic P/E, suggesting undervaluation amid sector-wide policy risks. The Trump administration’s pro-gas stance has created a regulatory vacuum, with automakers recalibrating capex to balance EV bets and ICE resilience.

Options Playbook: Leveraging GM's Volatility with High-Gamma Contracts
• MACD: -0.441 (bearish divergence), RSI: 36.67 (oversold), Bollinger Bands: $55.02–$62.61 (wide range).
• 200D MA: $51.26 (below current price), 30D MA: $58.62 (near-term support).

Key levels: $57.25 (intraday high) and $54.33 (low) define a tight range. Short-term technicals favor a breakout above $57.25, with RSI at oversold levels suggesting a rebound. The 52W high of $62.14 remains a critical target. Given the sector’s policy-driven volatility, leveraged ETFs are absent, but options offer high-gamma plays.

Top Option 1: GM20251024C56 (Call, $56 strike, 10/24 expiry)
• IV: 49.42% (moderate), Leverage: 21.98%, Delta: 0.6149 (moderate sensitivity), Theta: -0.1727 (high time decay), Gamma: 0.0779 (strong price sensitivity), Turnover: 86,119 (liquid).
• Payoff: At 5% upside ($59.97), payoff = $3.97/share. This contract balances leverage and liquidity, ideal for a breakout.

Top Option 2: GM20251024C58 (Call, $58 strike, 10/24 expiry)
• IV: 49.92% (moderate), Leverage: 35.28%, Delta: 0.4543 (moderate sensitivity), Theta: -0.1550 (high time decay), Gamma: 0.0799 (strong price sensitivity), Turnover: 22,529 (liquid).
• Payoff: At 5% upside ($59.97), payoff = $1.97/share. This high-leverage contract suits aggressive bulls expecting a sharp rebound.

Hook: Aggressive bulls may consider GM20251024C56 into a breakout above $57.25, while GM20251024C58 offers leveraged exposure to a 5% rally.

Backtest general motors Stock Performance
Below is the interactive back-test report for your “3 % Intraday-Surge” strategy on GM from 2022-01-03 to 2025-10-14. Open the module to explore detailed statistics, trade list and equity curve.Notes on auto-filled settings • Take-profit 10 %, stop-loss 5 % and 10-day maximum hold are standard short-term risk controls for momentum plays; feel free to request adjustments. • Start date is the first trading day of 2022; end date is today (2025-10-14).

Bullish Breakout or Bearish Reversal? GM's Crossroads
GM’s 2.68% rally amid a $1.6 billion write-down signals a pivotal moment. Technicals suggest a short-term rebound, with RSI at oversold levels and a potential breakout above $57.25. However, the $1.2 billion impairment and sector-wide EV slowdowns pose risks. Investors should monitor the 52W high of $62.14 and watch Ford’s 1.41% gains for sector sentiment. For now, GM20251024C56 and GM20251024C58 offer high-gamma plays on a bullish breakout. Action: Buy the breakout above $57.25 or short the 52W low of $41.60 if the 200D MA ($51.26) fails.