OK, this is a very risky trade for big boys only. You may lose everything or you may be buying me a car as a thank you present.
Google is way overbought at the moment and $400 is a big psychological barrier. Google is also worth $600 a share if they meet expectations in the next 4 quarters so this is a major, major risk play.
IF Google hits $400 and starts selling back of, the $400 put, either for this month or next, could be a very nice play. I will try to post here when it happens because if it breaks 400 on volume then all bets are off.
However, today is going to be a light trading day and all the junior traders will be wetting their pants and will not want to buy Google over $400 without permission so, unless a fund is driving the price up, $400 will make a major, major barrier.
A conservative option play would be to buy the December $400 put for let’s say $15 and, if the stock starts going past $405 – either take the minor loss or sell the December $390 put for about $10, limiting your loss to $5 and giving you $5 of upside potential.
I’m going to buy the straight put – if this stock really trades down, it may not bounce until $350 – but then I will be doing a "Mo Back!"
Good trading,
– Phil
