A Falling Off A Cliff Chart. I.B.M.

I.B.M. had a bad week. Here is how bad it was. Sometimes you see charts like this.

It was down $74.89 on the week. What happened? The headlines said "I.B.M. just sent a warning to dividend investors". Something about it missing earnings forecasts because of an artificial-intelligence-related shift in it's customers spending. That is a new one that we don't hear very often. Which way is this stock going to now move? It's probably dumb to be chasing this when the outcome will most likely be all so random. Just walk away and let I.B.M. figure out it's own problems. It may take time. Here is what the Calls nearest to what the stock is trading at are doing going into Monday morning's action. These are options that expire this Friday. Don't gasp and say that the premiums exorbitant? There are still expectations that the stock could rebound after such a big price decline.

Buying into a Call option position at this time after a big drop in price places you in a waiting game position. Waiting for a bounce. Waiting games are not fun. Option premiums will dry up quickly if the stock continues to go sideways. We just witnessed four days of sideway action. If we are looking for a "cup-shaped-rebound" we are not seeing one. These options shown have five days of trading life in them. To be continued.

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Not much happened on Monday with the stock up just $.33 cents on the day. What a way to stall out any hopes for a rebound. Call option players who got into this action a few days ago will be kicking themselves for having unrealistic expections. Look now at the same series of Call options going into Thursday morning.

They are now $6.73 "out-of-the-money" but still command a healthy premium. Now it's Thursday's five day chart.

Now it's 30 day chart.

It's funny how a 30 day chart smooths out the look of the big drop of a five day chart. It almost makes you want to think about looking at the one month out series of calls. Here is what one such series looks like.