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IBM

THE WEEK AHEAD: NFLX, IBM EARNINGS; ASHR, GDXJ, XOP, EWZEARNINGS: NFLX and IBM both announce on Tuesday after market close, so look to put on something in the waning hours of Monday's session if you're going to do a volatility contraction play. Pictured here is a NFLX (42/46) 25/10 iron condor,* with the short option strikes at the 25 delta; the longs at the 10 (as of Friday close). Metrics: $825 max profit; $1675 max loss; 24.6% return at 50% max; break evens wide of the expected move at 311.75/393.25, delta -.74, theta 16.21. Potential volatility contraction from the nearest weekly (April 18th: 78.6%) to the May expiry (44.2%) appears to be in the neighborhood of 40%. The wings can naturally be narrowed to generate a softer buying power effect (e.g., the 310/320/385/395 pays 4.18 ($418) with a max loss/buying power effect of 5.82 ($582), -.45 delta, 6.48 theta and with break evens still wide of the expected). IBM (67/29): The May 17th 130/135/155/160 is paying 1.50 at the mid with fairly wide markets and pesky strike availability in the May cycle where you'd ordinarily want to pitch your tent. On check on a similarly delta'd setup in the New York session, I'd pass if you can't filled with a fairly delta neutral setup for at least one-third the width of the wings. Potential volatility contraction from the nearest weekly (April 18th: 53.9%) to the following monthly (May 17th: 28.4%) looks to be fairly decent at around 45%. THE EXCHANGE-TRADED FUND FRONT Top of the List: ASHR (53/29), GDXJ (33/28), OIH (27/31), XLV (24/14), GDX (21/22), XOP (20/30), and EWZ (18/32). We're kind of mid-cycle here with May being a tad short (33 days) and June being a tad long (68 days), so would probably wait to put something on until June comes more into view. Since I don't have anything on in EWZ currently, I might make an exception there. The May 17th 26 delta 38/43 short strangle is paying 1.19, with break evens wide of the expected move at 36.81/44.19, delta -.16, theta 3.6. BROAD MARKET With VIX finishing the week at a penny north of 12, we could be in for a long, dry summer of premium selling (who knows, really). A good time to dry powder out and keep it dry for the next uptick in volatility ... . * -- There is some research in support of the notion that 25/10's more closely emulate short strangle performance over a large number of occurrences; this is naturally intuitive, since you're paying less for the longs, bringing in more credit, and therefore generating more favorable break evens over a tighter winged setup.
NASDAQ:NFLX
by NaughtyPines
5
Stellar – XLM – enter the position on 1 conditionHi Guys! We have good news regarding Stellar. First of all, they announced the partnership with IBM World Wire , a real-time global payments network that optimizes cross-border payments, forex, and remittances. As Coindesk reports: “Announced Monday, six international banks have signed letters of intent to issue stablecoins, or tokens backed by fiat currency, on World Wire, an IBM payment network that uses the Stellar public blockchain. The network promises to let regulated institutions move value across borders – remittances or foreign exchange – more quickly and cheaply than the legacy correspondent banking system. So far three of the banks have been identified – Philippines-based RCBC, Brazil’s Banco Bradesco, and Bank Busan of South Korea – the rest, which are soon to be named, will offer digital versions of euros and Indonesian rupiah, “pending regulatory approvals and other reviews,” IBM said. ” So this means the team of Stellar is extremely active and they progress massively. Dreams of sending money like an email are becoming more and more realistic . Here are details of the technical analy sis : • Ichimoku Cloud – the price is above the Cloud and Tenkansen(red) which is also over KijunSen (blue) – bullish • Weis Waves – lots of demand and almost no supply – g ood • Cup with handle observed - Let the price stay above 0.00002930 for a while. If we stay there with a couple of bars it means BUY. Targ ets to reach: 1. 0.00002930 2. 0.00003390 3. 0.00004020 4. 0.00004680 This makes possible to earn around 65% soon . What are your predictions? Do you have XLM on your radar too? Thank you for reading. Hit a like if like our job. Please do write a comment down below. MASSIVE Hugs! WBM Team
Long
by WBM_Team
3
THE WEEK AHEAD: IBM, SBUX, USO, OIH, XOP(Pulling hair out). Ugh. A tough market temporarily for premium sellers. With VIX caving in dramatically off of its late December greater-than-35 highs, premium selling is the old gray mare that (temporarily) just ain't what it used to be. That being said, there are a couple of potential earnings plays to be had next week: IBM (68/31; Tuesday after market close) and SBUX (67/27; Thursday after market close). As you can see by the background implied volatility metrics, well, they ain't great, with IBM coming in at 31 and SBUX at 27. That being said, the February to March implied volatility contraction in IBM at the moment appears to be potentially from 32.7% to 26.6% (23% or so), and the SBUX from 25.7% to 23.5% (9.4%). From that standpoint, IBM appears to be the better volatility contraction play, since the market's pricing in a bigger contraction in the "Watson AI" company than in the omnipresent coffee purveyor. However, if you're going to play Watson, you're going to have to deal with goofy five-wides in the monthlies which, in itself, makes the play unappealing. Using the weeklies for a more surgical approach gets you fairly wide markets. Again, unappealing. (Scratches IBM off his list). SBUX suffers from the same problem, but with two-and-a-half wides. I remember playing SBUX before, but don't recall having this two-and-half wide nonsense in the monthlies. (Scratches SBUX off his list, too). On the exchange-traded fund front, some implied volatility juice appears to be concentrated in the petros -- USO, OIH, and XOP, where it pretty much is to a lesser or greater degree all the time. This is why I pretty much have some kind of trade on and running in XOP almost all the time. (See Post Below for my current XOP trade). This isn't necessarily the greatest place to start a relationship with this underlying (the implied volatility's at the low end of its 52-week range), but it's not paying horribly. Due to its relatively small size (31.60 at Friday close), I like to short straddle it -- the March 15th 32 short straddle is paying 2.92 at the mid with a 25% max take profit .73, which beats a poke in the eye with a sharp stick. In light of the broad market volatility crush, this is just one of those weeks where I don't anticipate putting much on unless something dramatically changes or I stumble across something directional to play. Until then, I'll just sit on a bunch of dry powder, and it deploy it when the time comes.
CBOE:VIX
by NaughtyPines
IBM poised for new low?IBM usually bounces up twice before setting a new low. Bought various puts after SPX gap close this morning, decided to keep this one for another week. Target is $112. If you want to get greedy, $105 marks the double bottom, from Jan 2016, would recommend Jan puts. Balance sheet already looks like crap, and they're going to overpay for RHT? Not even sure how they're going to come up with $34B in CASH, but way over payment for a company trading at over 60x P/E. If they go through with it, say goodbye to dividends. I bet they nix the deal in January, and the stock goes back up. Of course, they'll get sued though.
NYSE:IBMShort
by hungry_hippo
4