Your small account has an edge that Wall Street can’t copy.
The sheer potential for incredible intraday gains.
Earlier this week, a $100 options contract turned into more than $217,000 the very next day. A 2,169% gain.*
Make this momentum work for you.
The math doesn’t feel real… especially when you realize the stock behind it only fell 26%.
I watched this play out in real time. But I trade the bullish side, so this wasn’t my play.
My trading style relies on strength, support, and setups that could bounce or breakout. Selling a company into the ground isn’t how I feed my family.
But there’s a lesson every trader should learn from this move…
The Day IBM Broke
International Business Machines Corporation (NYSE: IBM) posted its worst session since 1961 this week. The last time the stock had a comparable move, Ronald Reagan was president.
The trigger was a pre-earnings warning, with the real report still due July 22.
Management told investors the quarter would fall short. Second-quarter sales are now projected at $17.2 billion against Wall Street’s expected $17.85 billion. Non-GAAP earnings landed near $2.93 versus the $3.02 estimate.
Don’t let the decimal difference in sales fool you, that gap adds up to a sales miss of $650 million.
CEO Arvind Krishna pointed to soft mainframe demand. The z17 cycle cooled faster than planned, and clients redirected budgets toward servers, storage, and memory to lock in supply before prices climb.
Wall Street reacted quickly, the stock plummeted during pemarket hours. Microsoft Corporation (NASDAQ: MSFT) and Amazon.com, Inc. (NASDAQ: AMZN) both slid lower due to the AI fears.
Why I Trade Options
Anyone who happened to short IBM shares the day before the warning did pretty well. The stock fell from roughly $290 to $214, a clean 26% win.
But the put contracts were on a whole different level. The July 17, $242.50 puts spiked 2,169% overnight.
It was the same thesis, on the same stock, with completely different percent gains.
Short-dated options magnify every percent change of the underlying stock.
A $100 contract can turn into sizable gains, while the account risk stays capped at the number you paid to get in.
A cheaper entry, with a larger upside.
And the part that matters most for small accounts: you never needed to catch the full move.
The S&P 500 handed investors roughly 17% last year. Inflation ate 2.7% of your money over the same stretch. A fraction of the IBM move clears both marks in a single day.
You don’t have to time the top. You don’t have to nail the bottom.
Watch for the Bounce
The selloff already happened.
It’s next move could lean toward my trading strategy, toward the long side.
IBM is sitting above the $200 support from back in May 2026, and even further back, in 2024. If buyers defend it again, the crowd may step in ahead of the report.
Here’s a look at the chart on a shorter time frame:
It already bounced a bit on July 16. Let’s see if it can hold that level. Pay attention to the price action as we approach the official earnings release on July 22.
I can’t hold your hand for this one. I’m on the road with my boys and my mom for the last basketball trip of the summer.
But you don’t need me for this trade.
- Use the resources at your disposal.
- Remember the lessons I’ve taught you.
- Build a trade plan.
- And stick to it.
Remember, keep your size small. Summer volume runs thin while the big money sits on a beach until fall.
Mark your levels. Wait for your spot. React to what the chart shows you, not to what you wish it would do.
Patient people take money from impatient people. Wait for it to come to you.
Be good (and be good to others),
Ben Sturgill
*Past performance does not indicate future results. Not typical.
