DailyPlay – Opening Trade (IBM) – November 1, 2024

IBM Bearish Opening Trade Signal

Investment Rationale

IBM shows overbought signals, suggesting a likely selloff. Although its valuation aligns with industry averages, IBM is overvalued due to slower growth prospects and similar profitability. Key metrics reveal IBM’s lower expected growth in EPS and revenue, highlighting potential downside risks.

IBM – Daily

Trade Details

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish Credit Spread

Details: Sell to Open 5 IBM Nov 15 $212.50/$217.50 Call Vertical Spreads @ $0.90 Credit per Contract.

Total Risk: This trade has a max risk of $2,050 (5 Contracts x $410) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $410 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that is expected to continue lower from recent highs.

1M/6M Trends: Bearish/Neutral

Relative Strength: 9/10

OptionsPlay Score: 94

Stop Loss: @ $1.80 (100% loss to value of premium)

View IBM Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Thursday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View IBM Trade