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  • shy_poster shy_poster Apr 9, 2010 6:00 PM Flag

    Option trader CNBC

    Anyone caught the recommended play on goog on CNBC "Option's show? Please share if you caught it. TIA

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    • I don't get it. Everyone seems to be buying puts and calls. That is a sucker play. Selling them is easy money.Time works for you not against you.

    • it's later today- 2nd half of fast $

    • is good to buy GOOD May PUTS?

    • I meant "Neither" of those will work in your favor with April expiration.

    • They recommend buy June Put spread 560/510 for bearish trade.
      I think the 1500 option trade is too expensive if Goog goes above here

    • I'm not a Carter Worth fan. I watch Fast Money every night, and I seldom see much out of Carter to make me money.

      I was watching (in fact still have it on my DVR) and what he really was saying was that GOOG was at an inflection point. He suggested that earnings would be the catalyst for GOOG moving from the current level. He chose to suggest that GOOG would breakdown from this level. From a chart perspective, i would suggest that there is no reason that GOOG can't break "up" from the levels of last Friday's close.

      Given the activity of today, I feel even more comfortable suggesting that Carter got it wrong again.

    • ,,,,,,,,,,,,,,,,,,

    • This is what Kuo recommends:

      It is a bear spread on June puts. He thinks GOOG will drop really soon but by buying June puts, he gives the trade two months of time. Carter also shows three charts that GOOG is very bearish from TA perspectives.

      Buy 1 June $560 put (costs $2100).
      Sell 1 June $510 put (reduce cost by $600).

      The net cost is $1500 and he thinks GOOG will drop to $510 at least, so he gets $5000. Kuo expects he triples his money on this trade (234% return).

      I agree with him. GOOG is broken both on fundamental and technical. There is no better short. But shorting a stock has unlimited risk. Buying puts is the way to do it.

      • 3 Replies to blust35442
      • I detect sooo much negativity out there that every one and his neighbor is betting against goog and if we take a contrarian position and the assumption that "most" will get it wrong in the market and the few will collect the booties then goog may surprise and catch a lot of people with their pants down. As I stated before I have April 480 calls from when goog was at 542 and given all the negativity is considering keeping them and not even buy puts or do any plays to protect them. It's only money, and no guts, no glory. Thanks for all the feedback.

      • But don't you loose money if the stock moves the other way around??
        Here is my calculation for this CNBC recommended trade.

        June 560 Put :; That we pay $ 20.60
        Current Buy Put price $ 20.60
        If Stock price goes to 600- Put price is reduced to 9.60
        Loss.......................if you want to liqu $ 11. 00

        510 June Put Selling Price $ 5.50

        If stock Price goes to 600 the put price reduced to $ 2.10
        Profit by buying back to liquidate $ 3.40
        Net loss $ 7.60

        IF THE STOCK GOES TO 530

        Then the $ 20.60 Put becomes worth $ 41.00
        profit to liquidate $ 20.40
        The 5.50 Put that we sold will become worth $ 14.70
        Loss to liquidate ( buy back) $ 9.20
        Net Profit $ 11.20

        You loose $7.60 If the stock goes to $600
        You gain $ 11.20 If stock goes down to 530.

        I hope my calculation is right

      • Like Kuo said you gotta be careful. Remember...Goog should already be below 500 but it's not. There was a huge trade a couple of weeks ago that stopped the downturn which could very well happen to make this stock go up and not down at all. There is a lot of bad news against Goog at the moment. But if they blow out the quarter and guide higher...which they very well may do...this bad news will be forgotten. Upgrades will follow and the stock will move rapidly up close to if not above 600. In the summertime there maybe softness in the market and Goog might go down from 600 to 570 making Kuos put spread a waste of money. Remember Palm was left for dead and is now surging on unfounded rumors.

    • pimping his positions,,,

      imho,,,,,the polish news will become a reason to sell this market. it is sad news for them,, especially given how far they have come in the past few decades. we do not worry about 'terrorist events' cropping up within,,,,,,what we worry about is existing govt/biz ties as an entirely new administration will have to be placed..........and as you know people dont adapt to change well at times. again,,,we do not expect terrorist related or even unrest to develope,,,,,only confusion. poland is alot like Lance Armstrong getting cancer-->natural disaster no villian,,,,,but he fought back and won again.....lets hope poland does that as they are one of the few strong countries in that part of europe.

    • I will be taking the other side of the play.

      I'll be selling a 3% below put and buying a 4% below put provided the pricing gives me near 50% chance of collecting.

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