IBM Stock Dips Despite First Revenue Growth in 23 Quarters

Call buying has remained popular on IBM in recent months

Managing Editor
Jan 19, 2018 at 10:01 AM
facebook twitter linkedin

Technology powerhouse IBM Corp. (NYSE:IBM) is trading lower, as a disappointing full-year forecast overshadows the company's first rise in revenue in 23 quarters. In response, the tech stock has received mixed analyst attention. Of note, brokerage firm Deutsche Bank raised its price target to $160 from $150, while RBC cut its price target to $180 from $183. The Dow stock was trading 2.4% lower at $165 at last check.

IBM has had a rough year, dipping to a 52-week low of $139.14 in mid-August, though it's since recovered some of these losses. Of course, Big Blue is still far removed from its annual high near $183 from last February, and its 14-day Relative Strength Index (RSI) touched 81 yesterday, showing it was technically overbought coming into the session.

In the options pits, sentiment has been leaning towards the bulls' camp. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows IBM's 50-day call/put volume ratio is 2.21, ranking in the 97th percentile of its annual range. This suggests that calls have been purchased over puts at a faster-than-usual clip during the past ten weeks.

On the other hand, near-term options traders were more focused on puts, based on the tech concern's Schaeffer's put/call open interest ratio (SOIR) of 1.34 -- a reading that ranks in the 88th annual percentile, showing such a put-skew is unusual. Over the past 10 days, the January 2018 150- and 155-strike puts saw the largest increase in open interest by far.

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners