General Electric: Financial Company Dressed in the Bond Rating of an Industrial Conglomerate

General Electric Corporation (GE) is huge. And while a massive portion of their earnings comes from being a financial company dressed in the bond rating of an industrial conglomerate, they still represent one of the largest companies in the US on almost every benchmark. If you want exposure to the US market it's hard to ignore GE.

Friday, I sold short General Electric (GE) Jan 2008 strike puts. While GE is currently trading with a 35 handle, I wanted to be sure that next time the price went into the low 30's I paid attention. If it never gets there, I make a small premium of $0.50 a share.

An SRI note on General Electric for those of you trying to buy companies that are working on alternative energy sources: GE is trying to push itself as an alternative energy company. Don't let that fool you, they are mostly a financial company, with some industrial divisions on the side. A few of those industrial divisions have little areas that make wind-turbines, nuclear power plants and do research in alternative fuels or electric motors for vehicles. None of those areas will affect GE earnings in any material way.

Here's a copy of the Citizenship Report GE wrote for itself [pdf] (well at least they are thinking about being good citizens).

GE 1-yr chart:

Disclosures and Confessions: I do not own General Electric (GE). I have traded GE in the last two-years. I am short Jan 2008 30 Strike Puts as described above.