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Intl. Bus. Mach. - IBM - cls: 118.03 chg: +0.22 stop: n/a

Company Description:
International Business Machines Corporation (IBM) is one of the largest and most diversified hardware, software and services IT company in the world.

Why We Like It:
IBM is due to report earnings tomorrow, October 16th, after the market's closing bell. Shares have been consolidating sideways for weeks and we're expecting a big post-earnings move. Tomorrow is our day to open strangle positions. We're going to suggest both an aggressive October strangle and a less aggressive November strangle.

Suggested Options:
A strangle involves buying both an out of the money call and an out of the money put.

For the aggressive October strangle where the options expire in four days. Our estimated cost is $1.20. We want to sell if either options hits $2.40.

BUY CALL OCT 125 IBM-JE open interest= 9548 current ask $0.65
-and-
BUY PUT OCT 110 IBM-VB open interest=12331 current ask $0.55

For the November strangle. Our estimated cost is $3.00. We want to sell if either option hits $6.00.

BUY CALL NOV 125 IBM-KE open interest=6756 current ask $1.55
-and-
BUY PUT NOV 110 IBM-WB open interest=4186 current ask $1.45

Picked on October 15 at $118.03
Change since picked: + 0.00
Earnings Date 10/16/07 (confirmed)
Average Daily Volume = 7.5 million
 

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