IBM Just Had the Worst Day in Its History. Here's How to Get Paid to Buy the Dip.

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Missed revenue, missed earnings, but most damningly, the company stated that many of their clients are shifting their "quarterly capex towards servers, storage, and memory purchases" in the last few weeks of June, implying that customer spending will be down in the upcoming months.

Now, if you're bullish on IBM, this might present a good opportunity to buy - an opportunity that comes around maybe once every 10- 15 years. After all, it's still a good business, despite the sour guidance.

If you're thinking of going the options route, selling a put option might be a good idea. Barchart's option dashboard pretty much says it all:

IV rank is highly elevated, meaning for option sellers, the opportunity is there; all you need is the right move.

For those unfamiliar, selling a put, or being "short" a put, involves collecting an upfront premium in exchange for agreeing to buy a stock at a predetermined price (strike price) if the option is assigned before it expires. The goal of short puts is for the stock to trade above the strike price at expiration, allowing you to keep the entire premium without further obligation.

The reason why you're starting with this strategy is that options generally become more valuable when implied volatility is elevated. Since IBM's earnings miss sent volatility soaring, put premiums are higher than usual, allowing you to collect more income for taking on the obligation to buy the stock.

But that's the crux here: if you sell an option, you commit to buying 100 shares of IBM if assigned. That means you need the buying power to do so and, more importantly, you need to believe that the stock's price will improve later on.

However, that same risk is also why selling puts is one of the best ways to buy stocks at a discount. If you set the strike price below the current trading price and get assigned, you get paid to wait for IBM to go down to your preferred purchase price.

From IBM's overview page, click Naked Put on the left-hand side, below Option Strategies.

Once there, you can change the expiration date from this drop-down.

I often prefer to sell puts 30-45 days out. This way, I get the benefit of higher premiums because of the additional time value, while still allowing theta decay to work in my favor as expiration approaches.

So here are short put trades expiring on August 21, 37 days away from today.