Option Bulls Jump On International Business Machines

International Business Machines Corp. (IBM) CEO Ginni Rometty pledged to grow new businesses

Digital Content Group

Feb 26, 2015 at 10:57 AM

Calls have been the options of choice in International Business Machines Corp.'s (NYSE:IBM) options pits lately. The stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 1.91 indicates calls have been bought to open at nearly twice the rate of puts during the last two weeks. What's more, the ratio ranks in the bullishly skewed 90th percentile of its annual range.

IBM calls are again in high demand this morning, with the contracts crossing at 1.4 times the expected intraday rate. Traders are apparently buying to open the security's out-of-the-money March 165 call, in the hopes IBM will topple the strike by the close on Friday, March 20 -- when the front-month options expire.

This morning, the tech stock is sitting 0.2% higher at $163.06, after International Business Machines Corp. (NYSE:IBM) CEO Ginni Rometty committed to spending $4 billion to grow revenue from new businesses over the next few years. Longer term, however, the shares have struggled -- falling 12% on a year-over-year basis. Should this downtrend resume, a capitulation among option bulls could result in headwinds.

Follow @Schaeffers

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!