tech
A legacy tech stock is setting up for big gains ahead. How to trade it while hedging risk
Jeff Kilburg of KKM Financial breaks down how he's trading this tech giant.
TL;DR
- IBM's stock rose over 12.5% following a $1 billion federal grant from the CHIPS and Science Act for quantum computing supply chain development.
- The stock's market cap increased by approximately $26 billion due to this government intervention.
- IBM is advancing broader technology offerings, including new AI inference and virtualization services, and expanding its partnership with Oracle for watsonx AI.
- A specific options trade strategy is proposed, involving a call spread and a sold put, to manage risk and capture potential upside.
- The proposed trade has a defined cost and offers significant potential upside, with the stipulation that the investor must be prepared to own IBM shares if the price falls below $240 by expiration.