How to Buy GM Stock Options
On June 1, 2009, U.S. automaker General Motors Corp. filed a voluntary petition for reorganization under Chapter 11 in U.S. Bankruptcy Court. GM changed its name to Motor Liquidation Company in connection with the sale of substantially all of its assets pursuant to Section 363(b) of the Bankruptcy Code. GM's stock was delisted from the New York Stock Exchange, but still trades on the pink sheets, an over-the-counter exchange for delisted stocks.
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Instructions
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Contact your broker or look up the ticker symbol for Motor Liquidation Company, the new name for General Motors Corp. The ticker for Motor Liquidation Company is MTLQQ.PK.
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Determine your strike price and expiration date. The strike price is the price at which the option will become profitable; that is, the price that you think the stock will move to. The expiration date is the date on which your right to use the option expires.
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Put in a purchase order with your broker. Choose a buy (call) (put) option on the stock. If you believe the Motor Liquidation Company stock price will go up, buy call options. If you believe the stock price is going down, purchase put options. As of Sept. 9, 2009, demand was higher for put options with close expiration and the stock price at 73 cents. This signifies that the market believes is betting on a downturn in the stock.
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Tips & Warnings
The old GM is now trading under the name Motor Liquidation Company. As its name would suggest, any value in the company may be liquidated, so any investments in options would be purely speculative and high-risk.
