Decision Time for Big Blue – IBM Earnings Preview + Open Interest

IBM reports earnings on Tuesday, January 21st. The stocks has fallen after the last three reports. Implied volatility is lower than it was for the previous two quarters implying a + or – move of $7.81.

For next week, the implied volatility is at 44.6% pricing in a + or – move of $8.30.

This is likely a make or break moment for IBM which has been trying to make a come-back. Above its 200 day moving average at $190 and bulls are in control. If it falls back below $184 then likely show over.

Screen Shot 2014-01-19 at 10.21.35 PM

Here is the current open interest for January 24th expiration with the 175 and 180 puts having the largest open interest strikes:


Disclosure: I am long from $185.50 with February options and will take most (maybe all depending on how it acts Tuesday) of my position off before earnings.


8 Enlightened Replies

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  1. Jason says:

    Long call or put? That is important.

  2. Alec says:

    Could you please explain why u are bullish even if there is a higher OP for puts ? Your response will be appreciated

    • admin says:

      Based on the technicals of the chart not the open interest. I was bullish a couple weeks ago before even seeming open interest. Read in the education section about what maxpain and pinning is. It may not work for earnings, but I tend to like be on the opposite side of where puts and calls are.

  3. Sam says:

    What are your thoughts on opening a straddle/strangle position through earnings? I was looking at for example the feb $200 calls/$190 puts. Seems like the risk/reward is pretty good unless i’m missing something.

  4. Sam says:

    Oh also, how exactly are you getting those implied +/- dollar moves based on the IV?