Options Strategist
Summary: Earnings season is in full swing, and IBM is among the big names today. This article provides three potential trade setups - bullish, neutral, and bearish - for IBM's earnings release on July 19th, 2023.
Reason | High Implied Volatility (IV) due to numbers out on 19th July after market close |
Expectation | Limited movement in IBM shares after releasing the figures and imploding IV |
BEPs on expiry | Profit between $127.82 and $140.18 |
Max Risk | If you get a premium of $1.18 the max risk/loss would be $5 - $1.18 = $3.82 per share. 1 contract = 100 shares. Max Risk/Loss = $3.82 * 100 = $382. If you were to perform such a trade it is good practice to wait until 1 to 4 hours before market close and try to get at least 1.50 credit, in order to maintain a good risk/reward-ration. The higher credit receive, the less risk you take. |
For Who? | Only for traders/investors to adhere to the view that the numbers will not cause a move outside the expected move in the share price of IBM. |
Trade set up | Sell the Iron Condor in the last 1 – 4 hours of trading on Wednesday 19th for around $ 1,45 - $1,50 (stagger in case of bigger positions). The more you can receive the more you limit your risk. |
Closing | A GTC (Good Till Cancelled) order to close the position at $0,30 (stagger in case of bigger positions) |
Emergency | If there is a big move in the underlying outside the bandwidth of the long strikes, monitor closely and close position latest on the 21th of July 2- 4 hours before expiry |
Probability of Profit | 60.77% |
Expected Move | for 21th July ’23, based on ATM straddle: +/- $xx.xx |
IV Rank | 33.64% |
Bond. Long Bond(s)
With real rates being too positive, we see three scenarios: Opportunity to lock in rates at cycle high, government overreach to keep the economy afloat or a complete reset of the economy.
Steen Jakobsen,
Chief Investment Officer
Is a bond bull market ahead? Inflation still poses a risk for investors, but the moment for increasing duration to your portfolio may be approaching towards the end of the year, when central banks might be forced to cut interest rates.
Althea Spinozzi,
Senior Fixed Income Strategist
The furious rate hike cycle has brought gains in the US dollar, but with stagflation risks in Europe and the UK and weakness in the Chinese economy, USD may have more room to run. But a strong dollar could also have repercussions for US growth, emerging markets and commodity prices.
Charu Chanana,
Market Strategist
With the cost of capital rising painfully, stagflation fears are back, illuminating the fragile state of the green transformation, while giving a tailwind to nuclear power, and threatening the growth of AI-related stocks.
Peter Garnry,
Head of Equity Strategy
With supply tightness not only in energy but all commodities, the momentum in commodity prices may continue, pressuring central banks to lower real rates. That could be a good setup for precious metals, including gold, silver and potentially platinum as well.
Ole S. Hansen,
Head of Commodity Strategy
As the pandemic showed, even the US Treasury can experience seismic shifts. With the government increasing the pace of issuing bonds to support fiscal spending, the complex Treasury market and regulatory constraints could spark a liquidity event.
Redmond Wong,
Market Strategist
The tide has turned for bonds. Given the current yields, bonds have become an attractive investment, with added benefits including lower risk than stocks, increased diversification and a steady stream of income unaffected by economic changes.
Peter Siks,
Investment Coach
