As stocks struggled to eke out gains on Thursday, one particular company weighed heavily on the Dow Jones industrial average.
IBM, which has tumbled more than 10 percent year to date, was the biggest Dow laggard on Thursday. And according to one trader, it's about to get a lot worse for the tech giant.
Todd Gordon of TradingAnalysis.com said IBM's underperformance in relation to the S&P 500 over the past two years is a troubling sign. In September, the company's stock entered a downtrend channel, which is pointing to further losses, he said.
"In mid-2013 you saw a divergence. The S&P continued higher, while [IBM] started to move lower. That's a key warning sign," Gordon said Thursday on CNBC's "Trading Nation." "Now, as we get a sign that the S&P is starting to pull back, IBM should really be hammered on the downside."
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In an attempt to capitalize on this thesis, Gordon is selling the IBM November 145/150 call spread for $1.83. In other words, Gordon is selling the November 145-strike call and buying the November 150-strike call, which will allow him to keep the full $1.83 per share, so long as IBM is below $145 at November expiration. IBM shares closed Thursday at $143.67.
Meanwhile, if IBM does rise to $150 or above, Gordon stands to lose $3.17 per share.
"It's not a great risk-reward, but all we need the market to do is not go into this [$145-150] zone ... and we still have the ability to make money on this trade," Gordon said Thursday.