Why should I trade IBM stocks?

IBM is one of the largest and most diversified technology companies in the world. That allows the stock to trade very differently from many other technology stocks. It is more of a large cap investment than a growth stock, with a very generous dividend and quite low growth when compared with many new technology companies. The diversification of the company should make the stock price smoother, but IBM still tends towards volatility and choppy price action, perhaps because it reacts to so many events in the tech space.

Is IBM the best technology stock for trading?

We don’t think IBM is necessarily the best technology stock for trading, but the choppy price action does make it quite good, particularly for day traders and for swing traders. Looking at a longer-term chart of IBM prices shows a good deal of peaks and valleys, and frequent directional changes. This type of volatility is excellent for trading, even though the large dividend classifies the stock as more of an investment than a trading stock. By trading through CFDs at AvaTrade its possible to capture both the moves higher and moves lower, which makes trading IBM with us an attractive proposition.

What’s the best strategy for trading IBM stocks?

First of all it’s important to understand that IBM has been trending lower since 2012. Until that trend changes, we would recommend that any strategy for trading IBM stocks emphasize shorting the stock. And this is perfect when trading at AvaTrade since our CFD instruments allow traders to go short just as easily as they go long, without any additional rules or regulations. The constant up and down of the stock also calls for a strategy that can take advantage of the frequent changes, such as a moving average crossover type of strategy.

IBM Stock

Start trading Now

Headquartered in Armonk, New York, IBM (International Business Machines Corporation) is a mammoth technology company that serves its customers through five business segments: Technology Services & Cloud Platforms, Systems, Global Business Services, Cognitive Solutions, and Global Financing. The company was founded on June 16^th, 1911, when Charles Flint amalgamated four companies that had focused on technology since the 1880s. Thomas Watson would later join as a co-founder, and he helped shape one of the biggest technological influencers in modern history. The company quickly evolved into major manufacturers of punch-card tabulating systems used by governments and big businesses, and in the late 1930s, IBM became an industry leader in the production of electric typewriters. During World War II, IBM invented electromagnetic calculators, devices that served as forerunners of the electronic computer. This marked an entry into the American computer field, where IBM dominated, producing over 80% of computers used domestically by the 1960s. The company focused on mainframe computers, but it entered the personal computer market in 1981 by introducing the IBM PC, a device that achieved a major stock of the market then. The company failed to keep up with the demands of the PC market and downsized considerably during the 1990s. IBM continued the production of supercomputers and has consistently won multiple performance awards. Following multiple divestitures, IBM is solely focused on supercomputing, software and scientific research as of September 2020. The company is well known for technological innovation feats. Five of its employees have won Nobel prizes over the years, and ten have been inducted into the U.S. Inventors Hall of Fame. The ‘Big Blue’ also holds over 40,000 patents, the highest in the world. IBM has been a public company since its early days. It is listed on the NYSE, where it trades under the ticker symbol IBM. It falls into the Technology sector, under the Information Technology Services industry. IBM has survived the test of time by maintaining an active portfolio. Its major divestitures include the sale of its printer business in 1990 and the sale of its PC division to Lenovo. The company has also made major buys such as the 2018 $34 billion acquisition of Red Hat and the 2007 acquisition of Cognos for $4.9 billion.

IBM Stock History

IBM has had multiple stock splits in its history. There have been two splits since 1990: a 2-for-1 on May 28^th, 1997 and a 2-for-1 on May 27^th, 1999. Splits usually result in a cheaply priced stock, which can attract demand among investors. The IBM stock experienced stagnation since the 1980s, and it traded sideways below the psychological $50 price. The barrier was then breached in the late 1990s as the tech bubble gathered steam around the turn of the millennium. The stock sustained the rally which managed to print a high of circa $140 by July 1999. A sideways trend then again began, with the company facing a tough business environment. It was not until the beginning of 2009 that the stock started a multi-year rally, which would see an all-time high of circa $215 printed in March 2013. The stock has since tumbled, and as of September 2020, it trades just above $100.

How to Trade IBM Stock in South Africa

IBM is one of the most important tech companies in the world. Here are some of the factors to consider when trading the company’s stock:

Legislative and Taxation Issues
As a major inventor and innovator, IBM relies on solid legislation to protect its intellectual property rights. Also, as a tech company, IBM’s range of products and services are watched keenly as governments around the world take an assertive stand on data security and sovereignty. The prevailing taxation policy also has a significant impact on the company’s bottom line.
Trade and Tariffs Agreements
IBM has a massive global footprint, with operations in over 180 countries. This means that trade and tariff agreements between different jurisdictions can have a significant impact on the company’s revenues and profits.
Competitor Performance
IBM operates in a fast and dynamic industry, where it has to come up against fierce competitors such as Dell Technologies, Xerox, Infosys, Intel and Oracle. It is very important to track the performance of IBM’s competitors in fields where the company operates. When assessing the competition, investors can watch important metrics such as investment in research and development as well as the rollout of new products or technologies.
Periodic Earnings Reports
IBM’s fiscal year runs from January to December, and the company releases periodic (quarterly and annual) reports that paint a picture of its business health. IBM investors and stockholders are usually interested in the numbers posted by Global Technology Services, the company’s most profitable segment. Positive figures and outlook will always provide tailwinds for IBM stock, whereas negative numbers and outlook will typically provide headwinds for the stocks.

IBM operates in a fast and dynamic industry. It is therefore prudent to watch out for the potential short-term impact of these factors on IBM stock as opposed to their possible long-term impact.

AvaTrade IBM Stock Trading Information

MT5 Symbol: #IBM
FX Trading Hours: Monday – Friday (GMT) 13:30 – 19:59
Country: US
Currency: USD
Exchange: Nasdaq
Typical Spread: 0.13%
Units: Stock
Minimum Trade Size: 1
Leverage:

Why Trade IBM stock with AvaTrade

Here is why you should trade IBM with the award-winning AvaTrade ZA:

Global Brand
AvaTrade ZA is an internationally regulated brokerage company, having achieved licenses and authorisations in 7 various jurisdictions around the world. This ensures that you will be trading IBM on a safe, secure and transparent platform.
Leverage Trading
Trade IBM with a leverage of up to and enter the market even on marginal price changes.
Go Long or Go Short
In every sense, IBM stock has seen better days, but no need to worry. Trade IBM stock as a CFD via long or short positions on the AvaTrade trading platforms, whether the stock is rising or falling.
Trading Conditions
AvaTrade offers transparent, interbank pricing on all its tradable assets as well as competitive spreads and guaranteed, rapid execution at all times. Trade IBM and other assets with AvaTrade ZA.
AvaProtect™
Utilise the exclusive AvaProtect™ feature to hedge your trades against losses.

IBM Stock FAQ

Why should I trade IBM stocks?
IBM is one of the largest and most diversified technology companies in the world. That allows the stock to trade very differently from many other technology stocks. It is more of a large cap investment than a growth stock, with a very generous dividend and quite low growth when compared with many new technology companies. The diversification of the company should make the stock price smoother, but IBM still tends towards volatility and choppy price action, perhaps because it reacts to so many events in the tech space.
Is IBM the best technology stock for trading?
We don’t think IBM is necessarily the best technology stock for trading, but the choppy price action does make it quite good, particularly for day traders and for swing traders. Looking at a longer-term chart of IBM prices shows a good deal of peaks and valleys, and frequent directional changes. This type of volatility is excellent for trading, even though the large dividend classifies the stock as more of an investment than a trading stock. By trading through CFDs at AvaTrade its possible to capture both the moves higher and moves lower, which makes trading IBM with us an attractive proposition.
What’s the best strategy for trading IBM stocks?
First of all it’s important to understand that IBM has been trending lower since 2012. Until that trend changes, we would recommend that any strategy for trading IBM stocks emphasize shorting the stock. And this is perfect when trading at AvaTrade since our CFD instruments allow traders to go short just as easily as they go long, without any additional rules or regulations. The constant up and down of the stock also calls for a strategy that can take advantage of the frequent changes, such as a moving average crossover type of strategy.