How to Play Google Earnings, Again?

Google (GOOG) is announcing earnings today after market close. A $500+ stock and famous for it’s move post earnings, it is almost in every “speculators” list to play for the big event.

I covered GOOG earnings extensively. If you are looking for a play based on detailed analysis based, check out the past trades here.  There were 4 different types of plays and all were the winners.

So do you want to play again? what is your outlook on how much Google is going to move. If you expect Google to move more than $15-$20, you should not even read further.

I think it may be range bound when it opens tomorrow. It may move $10-$15 but not very much. Of course I may be wrong and I had been wrong in the past. So what to do? I would like to reduce my risk and hence I am willing to spend a very small sum for my views and I am willing to lose all as there will not be not much time left for Oct expiration.

Here is how I plan to trade this-

Buy Oct 520 Put Butterfly and 540 Call Butterfly. This trade can be done for $230 (as of this writing). In order for this trade to make money, Google should be between $512.3 and $527.6; and between $532.26 and $547.7

Goog Earnings Oct 2009
Goog Earnings Oct 2009

So if someone has a $10K portfolio, this will be 2.3% of capital. If you have a large cap portfolio, don’t invest more than a small fraction on it as you may lose 100% of the capital invested on this. Pls do your due diligence before you invest any single $$.  I am personally into this and many other variations for Google earnings.

The GLD trade was closed for nice profits.

All the best, Profitable Trading, OP






2 responses to “How to Play Google Earnings, Again?”

  1. Steve Place Avatar

    I wanted to be a net vol seller here as well– chose a double calendar (520/550) for my trade. If we get a pin on that 540 strike tomorrow we’ll both be very, very happy.

  2. OptionPundit Avatar

    Congrats Steve.

    In addition to the double butterfly, for OPN members I shared 520/540 double calendar as well. Let’s see how it opens today.

    Profitable Trading, OP

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