IBM Earnings
IBM stock is mildly bullish
IBM declares quarterly results after market close today. The stock is mildly bullish at this time and has returned +5% over 1 month. The 3-month return is +2.9% and YTD +12.8%. So last month has been good.
From the Options AI website I see that the projected move for the IBM stock post earnings is ~3.4% up or down. That gives us a IBM price range of $137 to $147. Yesterday it closed at $141.98.
The move after past 3 quarters has been:
Jan 21 - 22, 2021: -9.91%
Apr 19 - 20, 2021: +3.79%
Jul 19 - 20, 2021: +1.49%
So, to take a risk mitigated approach, I need to be looking at options that are ~10% out of the money. Note that I prefer to sell options to collect premium. Hence I am always looking for what the stock is unlikely to do.
The trend is mildly bullish so I will play to that trend and sell put spreads. That would be taking a bullish stance. Also, I will be trading the weekly options that expire this Friday to take advantage of the earnings volatility only.
If the premiums are somewhat reasonable, I will also sell deep out of the money call spreads to generate some returns turning the trade into an iron condor.