IBM Stock Slides on Disappointing Software Sales

Core Insights - IBM experienced a significant decline of 9.9%, reaching $254.13, marking its worst daily drop since October 2021, which negatively impacted the Dow Jones Industrial Average [1] - Despite reporting better-than-expected second-quarter earnings and revenue, IBM's software sales fell short of estimates, leading to mixed analyst reactions with three raising price targets while BofA Global Research reduced its target by $10 to $310 [1] - The stock has dropped to its lowest level since mid-May, moving away from its June 25 record high of $296.16, although it remains up 16.5% year-to-date [2] Options Market Activity - Options traders are highly active, with 52,000 calls and 69,000 puts exchanged, which is 12 times the typical daily volume, indicating a bearish sentiment [3] - The November 225 put option is the most popular, with new positions being opened there, reflecting traders' expectations of further declines [3] - IBM has historically outperformed options traders' volatility expectations, as indicated by a Schaeffer's Volatility Scorecard (SVS) rating of 85 out of 100 [3]