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You got up one morning and saw that IBM (one of your favorite companies) had dropped 20 percent in price because they had not met
You got up one morning and saw that IBM (one of your favorite companies) had dropped 20 percent in price because they had not met earnings expectations for the quarter. You are certain that they will regain at least half of the price drop over the coming weeks. What factors should you consider before moving into the market and buying an IBM call option? If you are of a firm mind to buy one regardless of what I say, then what characteristics should the option have, i.e., time to expiration, strike price, etc.?
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