IBM NYSE:IBM options were thrown into chaos Tuesday after the stock plunged roughly 25% on disappointing preliminary results, crushing bullish bets and rewarding traders positioned for a sharp drop.
IBM reported preliminary revenue of $17.2 billion, well below Wall Street expectations, sending shares into the $217 to $222 range. The sudden move dramatically reshaped the July 17 options chain.
IBM sells enterprise software, mainframes, consulting services and hybrid-cloud tools. The company also has growing exposure to AI and quantum computing, making the revenue miss especially jarring for investors.
The $300 calls, which carried 8,580 contracts of open interest, collapsed more than 99% to a one-cent bid. The $220 calls fell 89% to $7.75, while the $230 calls dropped 94% to $3.60.
On the other side, $230 puts surged 115,800% to $11.59, while $275 puts jumped more than 4,300% to $52.60.