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IBM

THE WEEK AHEAD: NFLX, IBM, CSX, EBAY, MSFT EARNINGSAlthough many of next week's earnings plays aren't up to my usual snuff due to lower implied volatility invading the entire market with VIX at sub-10 levels, some of these announcements might offer decent premium even though the metrics for a volatility contraction play aren't ideal (>70 implied volatility rank, >50 background implied volatility). Here, I'm looking for at least 70% probability of profit setups and -- for defined risk -- greater than one-third the width of the widest wing in credit. Look to put these plays on in the waning hours of the session immediately before the announcement and take profit for short strangles and iron condors at 50% of the credit received; 25% for short straddles/flies. NFLX: Announces Monday after market close July 28th 148/177.5 short strangle Probability of Profit: 74% Max Profit: $391 at the mid Max Loss/Buying Power Effect: Undefined Break Evens: 144.09/181.41 (> 1 SD, both sides) July 28th 141/146/175/180 iron condor Probability of Profit: 68% Max Profit: $169 at the mid Max Loss/Buying Power Effect: $331 Break Evens: 144.31/176.69 (> 1 SD put side, slightly less than 1 SD call) IBM: Announces Tuesday After Market Close July 28th 149/160 short strangle Probability of Profit: 69% Max Profit: $251 at the mid Max Loss/Buying Power Effect: Undefined Break Evens: 146.49/162.51 (at 1 SD, both sides) July 28th 144/147/162.5/165 iron condor Probability of Profit: 71% Max Profit: $68 at the mid Max Loss/Buying Power Effect: $232 Break Evens: 146.32/163.18 (at 1 SD, put side; > 1 SD call) Notes: The iron condor is probably not worth it, given the fact that you're being paid less than 1/3rd the width of the strikes in credit for a 70% probability of profit setup. CSX: Announces on Tuesday After Market Close July 28th 53/57.5 short strangle Probability of Profit: -- Max Profit: $96 at the mid Max Loss/Buying Power Effect: Undefined Break Evens: 52.04/58.46 Notes: For some reason, my platform isn't generating probability of profit metrics for this setup. The short strangle is likely to be around 70% with 1 SD break evens; given the fact that the short strangle is only paying $96, there is no way an iron condor with a >70% probability of profit would pay that, so it's not set out here. The defined risk alternative is to go iron fly: July 28th 51/55/55/59, Probability of Profit: 50%, Max Profit: $212 at the mid; Max Loss/Buying Power Effect: $188; Break Evens: 52.88/57.12 (expected move, both sides). In spite of the 50% probability of profit, not too shabby with reward/risk, since you're risking about one to make one. EBAY: Announces Thursday After Market Close July 28th 35/39 short strangle Probability of Profit: 70% Max Profit: $93 at the mid Max Loss/Buying Power Effect: Undefined Break Evens: 34.07/39.93 (at 1 SD, both sides) Notes: As with the CSX play, there's no way a 70% probability of profit defined risk iron condor will pay 1/3rd the width of the widest wing if the short strangle's only paying .93. Again, the alternative is go iron fly: July 28th 33/37/37/41, Probability of Profit: 50%; $210 at the mid; Max Loss/Buying Power Effect: $190; Break Evens: 34.90/39.10 (expected move, both sides). MSFT: Announces Thursday After Market Close July 28th 70/75.5 short strangle Probability of Profit: 70% Max Profit: $118 at the mid Max Loss/Buying Power Effect: Undefined Break Evens: 68.82/76.68 (1 SD, both sides) July 28th 67/70/75.5/78.5 iron condor Probability of Profit: 66% Max Profit: $86 at the mid Max Loss/Buying Power Effect: $214 Break Evens: 69.14/76.36 Notes: The iron condor's payout is on the edge of being worthwhile; implied volatility would need to ramp up a little bit running into earnings.
NASDAQ:NFLX
by NaughtyPines
Long IBM by selling June Put Spread 150/140IBM has been pulled back form 184 for almost 30$. After the news of Buffet reduce 1/3 of his position, IBM gap down but start to bounce back. RSI and CMO both showed oversold signal. I would like to set up this position long IBM. Position: Credit Put Spread: -1x, June 150/140, Premium: 1.2$ Break Even: 148.8$ PoP%: 75% Target: 50% of the premium. In case IBM continue going down, I am ready to be exercised and get IBM stocks with $148.8 per share.
NYSE:IBMLong
by rockgy
IBM - Weekly Swing Trade1. IBM has moved up nicely after bottom in 1Q 2016. Prices exceeded the weekly 200sma for the first time in 18mths and have reached a Measured Move target around $184. 2. Prices are due for a 10bar/2 leg retracement or consolidation before continuing upward to test $190-$200. 3. Continue to watch the pullback and look for an entry near the Breakout level of $170, which also coincides with the 200sma support. 4. I will update with the options play as we get closer to an entry. 5. Prices have clean trend, respect for 34EMA and an RSI that peaked cleaning with price convergence. Good looking potential setup.
NYSE:IBMLong
by TradingBandito06
$IBM Slam Down Coming, Check Out This Chart...Shares of International Business Machines Corp. (NYSE:IBM) are on the verge of a sharp fall based on the stock hammering into not one, but two trend line resistance points. This can clearly be seen on the stock chart below and is a warning to investors to sell their long positions and maybe even short the stock into year end. January might be ugly for IBM. The pull back level is likely $155.00 from its current $166.99 in January 2017 alone.
NYSE:IBMShort
by jenny_rebekka
IBM: Earnings out tomorrowLet's monitor IBM here, after earnings we might a drop down to support, where it can be an attractive long. We have to wait one day more after earnings are out, to trade it, but we can already label the key levels on chart, and determine what our bias is going into the report, and what fundamentals tell us. I like IBM here, specially if it drops lower, with 8.5% earnings yield and a 6.6% free cash flow yield, growth opportunities are around the corner for IBM. Revenues have been down, but technicals favor uptrend continuation in the monthly chart, specially if we manage to break above the downtrend mode to the left soon. Good luck, Ivan Labrie.
NYSE:IBMLong
by IvanLabrie
2
THE WEEK OF 10/16: WHAT I'M LOOKING ATWhile I grind away on various covered call positions (I only have one covered call with an October short call on; the rest are in November or December), I'm looking ahead to some decent earnings for premium selling. Generally, I'm looking for underlyings whose implied volatility is above the 70th percentile for the past 52 weeks and that have background implied volatility of greater than 50% to play for a contraction in volatility immediately following the earnings announcement, with the go-to strategies being short strangles or iron condors. Currently, there are four underlyings with good liquidity options that announce earnings next week and whose volatility is above the 60th percentile for the preceding 52 weeks: IBM, NFLX, UA, and EBAY. I'm screening for >60 implied volatility rank at this point, since volatility in these could still ramp up to my >70%, meaning that they might be worth keeping an eye on. IBM -- Announces 10/17 after market close. The implied volatility rank is now in the 85th percentile. Unfortunately, the background implied volatility is far from being up to snuff at this point for me (28.3%). NFLX -- Announces 10/17 after market close. Implied vol rank: 64th percentile; implied volatility 56.6%. It's very nearly "there". Hopefully implied volatility pops a little more right before earnings. UA -- Announces 10/17 after market close. Rank: 62; implied vol 41.7%. Needs more. EBAY -- Announces 10/19 after market close. Rank: 93; implied vol 41.6%. Needs more. After I look at implied volatility percentile and the background implied volatility, I look at what I can get out of a setup. Generally, I'm shooting for a 1.00 credit for either a short strangle or iron condor, since I look to take these off at 50% max profit (i.e., a .50 ($50)/contract profit). Alternatively, I look at whether a short straddle or iron fly would make sense if the underlying is just too cheap to yield a decent enough credit. With short straddles/iron flies, I generally look to get 2.00 in credit at the outset, since I tend to manage those at 25% max.
NYSE:IBM
by NaughtyPines