On July 14, 1789, the people of Paris stormed the Bastille, marking the violent end of the Ancien Régime’s absolute authority. Today, on the very same day (albeit 237 years later), the stock market launched its own financial revolution against the Uncivil Regime of technology: the International Business Machine.
IBM The stock price fell more than $73 to about $217. This is an astonishing 25% drop in one day. This is the steepest single-session decline in my lifetime, rivaling a scale of destruction not seen since January 3, 1968, before I was born.
The catalyst for this sudden coup was a preliminary sales mishap in the second quarter. IBM reported revenue of $17.2 billion, lower than Wall Street’s estimate of $17.9 billion due to a 7% decline in its infrastructure division. CEO Arvind Krishna said business customers have shifted spending away from IBM’s legacy products and set aside cash to buy hardware, servers and storage in case of AI-driven supply shortages or impending price increases. This may not be an independently verified trend, and may just be in Krishna’s favor, but the market did not wait for judgment. The sentence was absolute and the execution swift.
But where there is panic, there is a premium. A crowd has gathered at the option pit but has not dispersed. Usually, when bad news flows in, implied volatility causes a rapid “stock price crash.” Rather, IBM’s one-month implied volatility is trading at 99.6%, dwarfing the premium expansion seen during the 2019 taper tantrum, 2022 rate bear market, and various tariff tantrums, which was exceeded only by the 2020 “pandemic plunge.”
IBM since the beginning of the year
With the market pricing in complete disruption, now is the time to adopt a “keep your head down” stance on high premiums. The stock has already endured a massive 25% structural rerating, so much of the downward momentum is likely exhausted. By selling the monthly 190/245 short strangle on August 21, 2026, you can collect a huge premium from frightened buyers, betting that the stock will quietly consolidate within new post-revolution boundaries.
Premium Capture: ~$11.25 per choke (as of July 14, 2026, ends). This represents a static yield of 5.18% compared to the underlying stock price in just 38 days.
Lower break-even point: $178.75 (approximately 17.6% below current price) Upper break-even point: $256.25 (approximately 18.1% above current price)
This trade relies on a wide and symmetrical margin of safety. To break through the $178.75 floor (a level not seen since early 2024), IBM would need to fall another 18% from its already collapsed position. If you are forced to take assignments, you will establish long positions at historically deep discounts. On the bright side, to regain $256.25, IBM would need to recoup more than half of today’s historic decline by the August deadline, an unlikely feat given the sudden freeze in software and consulting budgets by companies.
As the dust settles from this Bastille Day crash, the market has left the door wide open for option sellers. Although the news was announced, option premiums remained elevated due to panic. For those who like to experience fear, a short choke offers a high probability avenue to watch the remaining premium slowly drain away.
