The useful question for a holder is not which way this breaks, but how much of the position the priced band puts in play.
International Business Machines (IBM) trades at about $237.28, and its option chain prices a band running from $155 to $358.42 over the next ten months or so. That band is not a forecast. It measures the room a holder is carrying, and the useful work is turning it into money rather than into a view on direction. The stock already sits about 28% below its 52-week high.
The $155 Floor And The $358 Ceiling In Your Own Money
From today’s price the ceiling sits about 51% higher and the floor about 35% lower. On a $10,000 position that band is about $5,110 of gain or $3,470 of loss, with…
