REFILE-US options exchanges to list GM options on Nov. 29

(Fixes punctuation in first paragraph)

* GM options is expected to draw strong interest

* Options debut on Nov. 29 to benefit GM shareholders

By Doris Frankel

CHICAGO, Nov 18 (Reuters) - Options on General Motors Co (GM.N) (GMMu.TO) shares will make their debut on Nov. 29, U.S. options exchanges said on Thursday, after the automaker's stock made its well-received return to public stock markets.

Demand for GM options is expected to be robust, options analysts and traders said.

"Following all of the publicity of the GM IPO, once the U.S. options exchanges list options, I would expect to see a lot of retail and institutional interest," said Patrick Mortimer, director of options trading at Pipeline Trading Systems, a block option institutional firm in New Hope, Pennsylvania.

GM shares rose 3.84 percent to $34.27 during the afternoon session on the first day of trading, following its initial public offering, the biggest in U.S. history. The shares earlier peaked at $35.99. For details, please see [ID:nN18285952] [ID:nN11173673]

The debut will be a benefit for GM shareholders who want to hedge their positions, sell calls to enhance yield or to speculate on share price direction.

An equity call allows investors the right to buy stock at a fixed price up to a certain date, while a put gives the right to sell stock at a preset price any time until expiration.

"The momentum of trading volume in GM will eventually calm down, which means that there will be quite a few shareholders who would like to sell call options against the stock to increase their return and to offset some of the downside risk," said Michael Schwartz, chief options strategist at Oppenheimer and Co Inc in New York.

"On the other hand, they can sell puts to possibly acquire more shares below the market value for those shareholders who bought the shares on the IPO price of $33 per share," he said.

Selling a put option obligates the seller to purchase the shares at a fixed price for a specified time period for which the investor is paid a premium.

The pricing of the options will be done by option market makers, who add liquidity on exchanges by providing continuous two-sided quotes for customers.

The pricing will be based on the stock's trading movement since their debut, Mortimer said.

If GM options were trading on Thursday and using interest rate and implied volatility assumptions similar to the options on Ford Motor Co (F.N) and Tata Motors Ltd (TAMO.BO) (TTM.N), the December $35 GM calls would likely be priced at a $1.60 bid and $1.80 offer per contract, said Jon Najarian, a co-founder of Chicago-based website optionMonster.com.

"GM's new offering had more shares than originally planned, which led to many more investors obtaining stock," said William Lefkowitz, options strategist at brokerage firm vFinance Investments in New York.

"So many investors are anticipating the trading in GM options, which would allow them to speculate, hedge or generate income," he said. (Reporting by Doris Frankel; Editing by Dan Grebler)