IBM is gapping to its lowest levels since mid-May
IBM (NYSE:IBM) was last seen down 9.9% at $254.13, eyeing its worst daily drop since October 2021, dragging the Dow Jones Industrial Average (DJI) in response. The tech firm is brushing off better-than-expected second-quarter earnings and revenue results, after the company missed software sales estimates. Three analysts lifted their price targets after the event, while BofA Global Research slashed its price target by $10 to $310.
Today’s bear gap has IBM dropping to its lowest levels since mid-May, moving sharply away from its June 25 record high of $296.16. The 150-day moving average looks like it will move in as support for today’s pullback, however. Year-to-date, the equity is up 16.5%.
Unsurprisingly, options traders are blasting IBM in response. So far, 52,000 calls and 69,000 puts have been exchanged, which is already 12 times the amount typically seen in a day. The November 225 put is the most popular by far, with new positions being sold to open there.
Notably, IBM has tended to outperform options traders’ volatility expectations over the past year. This is per its Schaeffer’s Volatility Scorecard (SVS) of 85 out of 100.