Tech stock IBM (NYSE:IBM) is down 3.9% to trade at $276.87 at last glance, brushing off the company's third-quarter top- and bottom-line win after software revenue growth showed signs of deceleration. Analysts responded with price target cuts and hikes, the most notable an increase from BofA Global Research to $315 from $310.
Today's pullback has IBM on track for its worst daily performance since July, though it still sports a 25% year-to-date lead. The 50-day moving average has captured the stock's steep drop to its lowest level since September, however.
Calls have been much more popular than usual over the last 10 weeks, per the stock's 50-day call/put volume ratio of 1.94 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks higher than 81% of readings from the past year.
Options are popular in response. So far today, 61,000 calls and 42,000 puts have crossed the tape, six times the average daily rate. Most popular is the weekly 10/24 270-strike put, where positions are being sold to open.
IVM tends to outperform these volatility expectations. This is evidenced by its Schaeffer's Volatility Scorecard (SVS) of 95 out of 100.
