GOOG earnings after close tomorrow - need options strategy

Discussion in 'Stocks' started by kpatter, Apr 13, 2011.

  1. kpatter


    Earnings after the close tomorrow - straddles are 27.00. Guys on options action said do April 550/600 strangle (about 11.00) means big move. Options are not too terrible expensive.

    Covered call gets you 14.00 ATM - too risky tho

    Any option gurus out there?
  2. What is your personal expectation of Google and what's your risk tolerance if you're wrong?
    That will go a long way in to deciding which strategy to use.
    Straddles/Strangles are basically looking for a big move to the upside or downside.
  3. I wouldn't do an April expiration on that 550/600 strangle either, since if the move doesn't materialize, time decay is going to chop a nice chunk of your position away. It's much safer to use May, even if it's going to cost you twice as much. If the move happens, you'll be more profitable with the April than the May, so it's up to you to strike a balance between risk and reward.
  4. Not too expensive? 25pts otm with 1 day to expiration and has an IV of 80.... it's a $1100 lottery ticket.
  5. considering GOOG on earnings generally has large swings and I believe has beat 22 times and missed 6 times on earnings, its not a terrible bet. But that being said you would have to close that position as quickly as possible bc the vol will most likely drop off dramatically after they report, not immediately but over the next couple of days.

    whisper numbers look to be $8.78 and options exp is tomorrow. Looks like a lot of premuim for those calls.
  6. MTE


  7. $8.08 earnings, 553 trading. See ya!!! longs are smoked!
  8. Did he modify his original post or was that you?
  9. will this be a "hype" after house report and not cause the Nasdaq, QQQ or NQ to go down tomorrow...maybe early dip down but then strong buy back later in the day?
    #10     Apr 14, 2011