Shares of IBM (NYSE:IBM) have lost more than 7% year to date. The company is scheduled to report earnings Tuesday after the closing bell.
On CNBC's "Options Action," Mike Khouw of Optimize Advisors said that IBM’s stock traded almost twice the average daily call volume.
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The options market is implying a move of around 5% after the company reports earnings, which is in-line with the average of the last eight quarters, he added.
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Bearish bets were a little higher than bullish ones. There was a buyer of 300 of the October 125 puts at an average price of $9.70 per contract, Khouw mentioned.
At $1,000 per contract, this trade represents an outlay of $300,000 in premium, he added.
The buyer of these contracts is betting that “IBM could retest the lows from last November,” Khouw stated.
