GOOG real play - any advice?

Discussion in 'Options' started by SuperBanda, Oct 15, 2010.

  1. Hi everyone!

    Few months ago, I was quite bullish on GOOG (almost when it was touching its bottom) and I went long Jan/12 calls at 460 strike for a premium of 80$.

    Today, trying to lock some of the profits, I went short Jan/12 calls at 590 strike, for a premium of 81$.

    Therefore I don't risk anything anymore, and my profit can range from 100$ to 13.100$ per contract.

    My idea is the following:
    - if GOOG keeps on running, I will buy back the calls sold today (when they will have little premium in their price) and sell new calls at a higher strike; at the same time buy puts at a lower strike;
    - if GOOG goes back to where it is coming from, I will buy back the calls sold today and wait for a new advance for more call sellling.

    What do you think?
  2. 1) It has some "merit".
    2) You've gone from being outright long to being in a spread.
    3) If you're sure about market direction, you should be in an outright position instead.
    4) Offset the original position and realize a profit when all of the news looks "rosy". :cool:
  3. My short answer is that I would have locked in the 90 pt gain on the 460 calls by closing the position. If still bullish there are many things you could do while risking only a portion of that huge gain.