GEV — Dec 940/1200 call spread
GE Vernova's equipment backlog reached $176.28B in FY26 Q2, up 37% year over year and up from $128.65B four quarters ago, while power transformers remain the buildout's hardest constraint at an average 128-week lead time. The Oct 28 print lands inside a December expiry, and at 28% of width the 940/1200 buys that catalyst without paying the ATM straddle's 20% implied move.
- Ticker: GEV
- Direction: Bullish
- Risk profile: earnings
- Confidence: high
- Catalyst: Q3 2026 earnings (BMO) — gas turbine orders, lead-time guidance (2026-10-28)
- Cohort: 2026-09-06
- Expires: 2026-09-13
- Max loss: $73.30
- Max gain: $186.70
Structure
- long call 940 2026-12-18
- short call 1200 2026-12-18
Signals
- Equipment backlog: $176.28B FY26 Q2, +37% YoY (DB)
- Power transformer lead time: 80-156 weeks, avg 128, CRITICAL (DB)
- Linked Meta capacity: 7,262 MW across 2 projects (DB)
- IV percentile (52w): 21.1, the low band where debit verticals price well (DB)
What invalidates this thesis
Backlog conversion, not backlog growth, is the line that matters now. If Oct 28 pairs record orders with slipping delivery schedules or turbine margin pressure, the multiple compresses even on a headline beat, and a 7.6% breakeven leaves no room for that.