Scientists with the International Business Machines Corp. (IBM) plan to unveil a prototype chip today that uses optical connections to increase the speed of moving data among chips to eight times that of previous technologies, The Wall Street Journal reported.
Audio Podcast:
An audio podcast of this article is available at: poweropt.com/podcasts/2007_03_26_IBM.mp3
The Journal stated the chip’s speed, clocked at 160 billion bits of data a second, would allow a high-definition movie to be transmitted over a short distance in a fraction of a second, compared with the half-hour it takes over home broadband connections.
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The technology could pave the way for devices that almost instantly transmit a digital X-ray to a doctor’s hand-held screen, a seismic analysis to an oil engineer’s workstation or movies around home networks, the Journal reported.
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IBM’s stock is down in recent months. After reaching a high of nearly $101 in mid January, the stock has declined to its current position of $95.03. Another positive factor for IBM is the company enjoys a profit margin of 10.3% compared to a 7.9% industry average. The company has a 15.60 P/E and a majority of analysts give IBM a strong buy rating.
Below, the PowerOptions blog takes a look at two covered call option trades for investors who believe IBM’s stock will rise or stagnate in the coming months.
Competitors:
Competitors for IBM include: Electronic Data Systems Corp. (EDS), Hewlett-Packard Co. (HPQ), Microsoft Corp. (MSFT), Applied Biosystems Group (ABI), Accenture Ltd. Class A (ACN), BearingPoint Inc. (BE), BEA Systems Inc. (BEAS), BMC Software Inc. (BMC), Computer Associates Intl. Inc. (CA), Compuware Corp. (CPWR), Cray Inc. (CRAY), Dell Computer Corp. (DELL), Datalink Corp. (DTLK), Diamondcluster Intl. Inc. (DTPI), NIC Inc. (EGOV), EMC Corp. (EMC), Dot Hill Systems Corp. (HILL), Infocrossing Inc. (IFOX), Informatica Corp. (INFA), NCR Corp. (NCR), Novell Inc. (NOVL), Network Appliance Corp. (NTAP), Nuance Comms. (NUAN), Oracle Corp. (ORCL), Pacificnet Inc. (PACT), Quest Software Inc. (QSFT), Rackable Systems Inc. (RACK), SAP AG (SAP), Sapient Corp. (SAPE), Sun Microsystems Inc. (SUNW), Sybase Inc. (SY), TIBCO Software Inc. (TIBX), Unisys Corp. (UIS), Vignette Corp. (VIGN), WebMethods Inc. (WEBM), and WebEx Communications Inc. (WEBX).
Potential Trades:
All of the following option trades have 54 days until expiration. IBM Corp is currently trading at $95.03. These trades were discovered using the powerful suite of option search tools found at PowerOptions.
| Covered Call – IBM Corp (IBM) $ 15.11 (54) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OPTION | Strike Info |
Opt Bid |
% Dnsd. Prot. |
% If Unch. |
% If Asgnd |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| IBMER | 07 MAY $90.0 | $6.20 | 6.50% | 1.30% | 1.30% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| IBMES | 07 MAY $95.0 | $2.80 | 2.90% | 3.00% | 3.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The 07 MAY $90 covered call trade, an in the money covered call, offers 6.5% downside protection and a potential profit of 1.3% if the stock remains unchanged or rises. The break-even price of this trade is $88.83. The net cost of this trade, per 100 options, is $8,883.00.
The 07 MAY $95 covered call trade, an in the money covered call, offers 2.9% downside protection and a potential profit of 3.0% if the stock remains unchanged or rises. The break-even price of this trade is $92.23. The net cost of this trade, per 100 options, is $9,223.00.
For more information about how to identify and research great option trades, visit the PowerOptions website. There you will find the data you need to make quick, clear, and informed decisions. You can trade knowing you have found the best investment. Also, PowerOptions will allow you, with a few quick clicks, to quickly and accurately compare trades. PowerOptions‘ premium customer support is second to none in the industry. They can be easily contacted when you need them at their toll-free number to answer customer questions. Call them now toll free at 877-992-7971.
PowerOptions provides a free 14-day trial of its service. So join PowerOptions today, and you too can start reaping the benefits of the covered call investment strategy.
PowerOptions‘ sister company PowerOptionsApplied provides expert stock option trading recommendations. PowerOptionsApplied specializes in covered calls, naked puts and iron condor stock options strategy recommendations. PowerOptionsApplied provides a 30-day risk free trial of its service.
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