IBM option hits entry point

[Triplethought]

IBM Jan 2023 $170 call "deploy another 1/3 in the $123.05 go $124.05 or if options $1.10=$1.20. Currently stock is at $120 so it's hit one of the two criterion. Options price is still higher than $1.20 with not much activity.

I have a SOL question. Left to my own devices I would lower the strike price on the next buy to say $140 or $150 - something more likely to actually happen in the next year given it's already down to $120. Yes that would be less upside for that option but also less risk. Why deploy another lot into $170 strike given it seems very unlikely given what we know now? It would require a 30% increase in stock in 1 year, which given IBM's size and financials seems a stretch. What am I missing?

[Triplethought]

also is the only reason IBM is down because Kyndryl is now trading separately? Meaning although the chart looks like IBM has nose dived it kinda just reflects the lower value of spinning off the subsidiary and will be the new normal??

Let me try to clarify my question. Sol if your entry point is based on staring at the graph and data of IBM BEFORE it spun off the subsidiary (i.e did you know that was going to happen) are the entry points out of date now and do they need to be redone? This is similar to what happened to us on MRK a while back.

BTW I just confirmed we now own options on both companies. The option reads IBM plus 20KD

[MarkD]

I was unable to buy fwiw today due to some website b.s. on TDAm. I am supposed to use a broker but thought to wait until tomorrow and see if it clears up.

[victor]

The reason that you were unable to buy is because the options are now “ns” or non-standard. This means that for every contract, you are entitled to execute 100 shares of IBM and 20 shares of Kyndryl. As Triplethought pointed out, IBM’s price is decreasing not due to a perceived loss in value but instead due to corporate action that separated a component of the business. This is why the “ns” options have not decreased in value and remain above Sol’s target of 1.20.

The new options that will be issued in the days to come, will be for 100 IBM shares alone. Those options should be less valuable and therefore would have different entry points.

To place orders to purchase non-standard options, you would have to call the broker as there are margin checks which need to occur to trade these equities.

Personally, I’m holding out for Sol’s option target of under 1.20 and ignoring the decrease in the price of the IBM stock.

[Triplethought]

spiked up a bit. maybe we should have bot the options

[AstuteShift]

Was not able to buy them yesterday with options but I was ok with buying shares. IBM is a sleeper

[Triplethought]

Was not able to buy them yesterday with options but I was ok with buying shares. IBM is a sleeper

Why do you think so. I personally think they're a sleeper as in an old man sleeping the days away on their way to dying.

[AstuteShift]

Was not able to buy them yesterday with options but I was ok with buying shares. IBM is a sleeper

Why do you think so. I personally think they're a sleeper as in an old man sleeping the days away on their way to dying.

That’s one of the reasons, it’s an MP play for me. Same with Intel. Eventually an AI bubble will form and these stocks will take off and not look back. Good dividend players too

[SOL]

IBM and INTC will pull a houdini. Patience is warranted. End of story

[Triplethought]

IBM and INTC will pull a houdini. Patience is warranted. End of story

I will follow your lead and have an order in for IBM (the base stock) but I still think you should adjust our entry points for the IBM option play given the price of IBM has fundamentally shifted after the split. Also - shouldn't our next bite at the option play extend our time premium and lower the strike price to reflect the new (lower) IBM pricing?

[Eric]

I bought a 2024 $160 IBM call for $4.25.

If Sol provides additional explanation and guidance on whether to buy old calls with Kyndryl options or new calls without I may join the official trade and but 2023 $170's.

[Yodean]

When I get bored (which doesn't happen much these days, there's so much sh*t going on), I generally buy some IBM or INTC. I don't really know why.

[SOL]

When I get bored (which doesn't happen much these days, there's so much sh*t going on), I generally buy some IBM or INTC. I don't really know why.

Did you buy the regular IBM call or the one with Kyndrl options? This way I can provide Eric with some reference point? If most individuals bought the regular IBM calls we can take that route. IBM and INTC are potential Godzillas if they can start doing the right thing, they could pull a Microsoft type move.

[Yodean]

Did you buy the regular IBM call or the one with Kyndrl options? This way I can provide Eric with some reference point? If most individuals bought the regular IBM calls we can take that route. IBM and INTC are potential Godzillas if they can start doing the right thing, they could pull a Microsoft type move.

In terms of the option trade, I bought my 1st lot of the IBM jan23/170 calls, filled @ 1.12, yesterday. I assume this doesn't have any Kyndrl component, since it's post-spinoff? This is my 1st option trade involving IBM.

I have a huge position in the IBM stock itself (I see it as a Bond, a Tech. Bond, like INTC, and a bit of a parking spot for excess cash reserves), and have been adding to it several times a week on dips, before and after the Kyndrl spinoff.

Speaking of which, anybody has an opinion on Kyndrl? I am holding it for the time being, but don't have a feel for this particular asset. Prolly sell it when Dow cracks 39k or copper breaks $5 to the upside, or something along those lines.

[Triplethought]

Did you buy the regular IBM call or the one with Kyndrl options? This way I can provide Eric with some reference point? If most individuals bought the regular IBM calls we can take that route. IBM and INTC are potential Godzillas if they can start doing the right thing, they could pull a Microsoft type move.

In terms of the option trade, I bought my 1st lot of the IBM jan23/170 calls, filled @ 1.12, yesterday. I assume this doesn't have any Kyndrl component, since it's post-spinoff? This is my 1st option trade involving IBM.

I have a huge position in the IBM stock itself (I see it as a Bond, a Tech. Bond, like INTC, and a bit of a parking spot for excess cash reserves), and have been adding to it several times a week on dips, before and after the Kyndrl spinoff.

Speaking of which, anybody has an opinion on Kyndrl? I am holding it for the time being, but don't have a feel for this particular asset. Prolly sell it when Dow cracks 39k or copper breaks $5 to the upside, or something along those lines.

I see INTC that way but not IBM. I worry IBM's time has passed if they can't make Watson relevant. So far my Machine learning friends say Watson continues to fail to impress. although I did buy more at $119 based on recommendations here.