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Investors in International Business Machines Corp (IBM) began trading new options for the August 8th expiration today. A notable put contract at the $285.00 strike price has a current bid of $9.10, allowing for a cost basis of $275.90 per share if sold to open. This represents a 2% discount to IBM’s current trading price of $290.24/share and has a 60% chance of expiring worthless.
On the call side, a contract at the $295.00 strike has a bid of $11.25, offering a potential total return of 5.52% if the stock is called away at expiration. This call is 2% out-of-the-money and carries a 52% chance of expiring worthless. The implied volatility for the put is 33%, while the call stands at 34%, compared to an actual trailing twelve month volatility of 28% based on IBM’s recent trading history.
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