That where the big boys money is. Yup..all the hype was from the spread. that is why they you can make money both ways. You can call it rigged or not but it is govt. job to limit hte shorters but it won't happen. for next two to three weeks buying Puts would be profitable.
Most of the time that is true, but today the IV on GOOG options crashed along with the price, making the premiums "cheap." For example, with GOOG at $557 the extrinsic premium on a May 550 was only $13 (total cost $20 includes $7 intrinsic value) a few minutes ago.
I think MM will finally be wrong this month. I recommend April $530 put/ $610 call strangle. If option price falls further, maybe $540 put/ $600 call. But you have to buy it at last minute (3:50PM Thursday).
I think China incident is no accident. GOOG management will either let the earnings go down the drain or surprise us on the big upside this quarter.
Buy the strangle, babe.
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.
We will see if Carter is right or wrong on Friday morning. Either way, GOOG should move $50 up or down, depending on the earnings.
I recommend buying April $530 puts AND April $610 calls assuming GOOG prices at
$570 on Thursday afternoon. Buy both at 3 to 1 ratio depending on if you are bullish or bearish. MM will pay a lot of money out this Friday.
I agree with most of what you said. Short term action is bullish and will likely continue up or consolidate until Thursday. After that, the stock movement will depend on what the company says during CC Thursday night.
Instead of a put spread, why not put on a very wide collar?
Technically goo should trade between 600 and 520.
Why not sell the 600 call at 8.80
Buy the 560 put 14.40
Or buy the 550 put for 10.60
May should cover this earnings season fine.
Why bother going till June?
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.
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.