$IBM Options Intelligence

🎯 SELL IBM DEC 19 320/330 CALL SPREAD

I recommend a bear call spread because the current term structure shows that near-term options are slightly overpriced relative to historical volatility, favoring premium selling strategies. IBM’s 30-day clean implied volatility (IV) is around 32%, which is above the baseline 90-day historical volatility of 27.4%, signaling an opportunity to sell premium. The stock is trading at $305.20, below the max pain point of $330, and the put/call volume ratio of 0.18 indicates heavy call buying but also elevated IV on calls, making call spreads attractive to collect premium with defined risk. Additionally, IBM’s RSI is neutral at 55.56, and the stock is just above its 20-day moving average ($304.90), suggesting no strong momentum for a breakout above $330 in the near term. The recent $6.7 million contract win and institutional buying show stable fundamentals but no strong catalyst for a sharp rally immediately.

Sell IBM Dec 19 320/330 Call Spread
Stock Price: $305.20 | Entry: Sell 320 Call Bid $5.00 / Buy 330 Call Ask $3.00 = Net Credit $2.00 (approximate)

📊 Trade Metrics

• Max Profit: $200 per spread (net premium received)
• Max Risk: $800 per spread (difference between strikes $10 minus premium $2)
• Breakeven at Expiry: $322 (Strike 320 + $2 credit)
• Win Probability: Moderate to high, as stock is 15 points below short strike
• Days to Expiration: 32 days (Dec 19 expiry)

📈 Term Structure & Volatility Analysis

• Baseline 90-day Vol: 27.4%
• 30-day Clean IV: ~32% (5% above baseline, signaling premium is rich)
• IV Rank: 100% (very high, favors selling premium)
• Earnings Date: Feb 4, 2026 (well after Dec 19 expiry, avoiding earnings volatility)
• Calendar Opportunity: No significant near-term IV skew for calendar spreads, so focus on credit spreads
• Market Maker Max Pain: $330 (above current price, providing resistance zone)

📈 Greeks & Volatility

• Delta (320 Call): ~0.30 (moderate probability of expiring ITM)
• Theta: Positive for seller (collects time decay)
• Vega: Negative for seller (benefits if IV contracts)
• Current IV: Elevated, likely to contract over time, benefiting premium sellers

🎯 Why This Trade

The term structure shows IBM options are trading at elevated volatility relative to historical norms, creating an ideal environment to sell premium. The Dec 19 expiry is 32 days out, providing enough time decay to collect premium without exposure to the next earnings event on Feb 4, 2026. The short 320 call is about $15 OTM, giving a cushion against a moderate rally, supported by technical resistance near $330 (max pain). Recent news includes IBM’s largest-ever contract win with Cirata and institutional buying by Raiffeisen Bank, indicating stable fundamentals but no immediate strong upside catalyst. The RSI at 55.56 and price slightly above 20-day MA suggest neutral momentum, favoring a range-bound scenario. This bear call spread captures premium with defined risk, suitable for a moderately bullish to neutral outlook.

📊 Pro Analysis

• Current IV at 32.1% vs historical 11.7% confirms rich premium
• Put/Call Volume Ratio of 0.18 indicates strong call buying interest but also elevated call IV
• Max Pain at $330 aligns with short call strike, increasing likelihood of price containment
• Technicals: RSI neutral, price near 20-day MA support, 50-day and 200-day MAs well below current price, indicating long-term bullish trend but short-term range-bound potential
• Dividend yield of 2.2% supports holding stock but does not strongly impact option pricing for this timeframe

🔍 Earnings Date Check

• Earnings on Feb 4, 2026
• Dec 19 expiry is well before earnings, avoiding earnings volatility spikes
• Trade captures premium decay without earnings risk

💡 Trade Management

• Entry: Place limit order to SELL 320 Call at $5.00 and BUY 330 Call at $3.00 for net credit $2.00
• Target: Close spread at 50% of max profit ($1.00) to lock gains early
• Stop: Close if IBM rallies above $325 before expiration to limit losses
• Time Stop: Close 3 days before expiration if spread is still open

📅 Market Overview

The current market environment for IBM is characterized by stable fundamentals with recent positive contract news and institutional buying, but no immediate strong catalyst for a breakout. The technical setup shows neutral momentum with the price hovering just above the 20-day moving average. The broader market’s elevated IV and max pain at $330 suggest resistance near this level. The Fed’s recent policy stance remains cautious, with economic data releases upcoming in early December that could increase market volatility. Given these factors, defined-risk premium selling strategies like bear call spreads are prudent to capitalize on elevated option premiums while managing risk.

🔒 Pricing Validation

• 320 Call intrinsic value: $0 (stock $305.20 < strike 320)
• 330 Call intrinsic value: $0 (stock $305.20 < strike 330)
• Spread intrinsic value: $0
• Bid/Ask prices respect put-call parity and intrinsic value rules
• Credit spread net premium $2.00 is realistic and fair given IV levels

Confidence Level: Moderate to High. The trade benefits from elevated IV, a neutral technical outlook, and no upcoming earnings risk. The defined risk structure limits downside while collecting premium in a high IV environment.

Risk Assessment: Maximum loss is $800 per spread if IBM closes above $330 at expiration, but the 15-point cushion below the short strike and technical resistance reduces this probability. Time decay and potential IV contraction favor the seller. Close management is advised if price approaches $325.

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If you want, I can also provide alternative bullish or neutral strategies or calendar spreads based on your risk tolerance.