Discussion in 'Options' started by cks316, Nov 17, 2006.
Google is pretty high right now, I was thinking about a long put option.
It's at all time highs. If it breaks 500 it could easily gain a ton of momentum.
Since you're young, I'm going to give you a break and not hit you over the head with anything rude but...
WTF ARE YOU DOING LOOKING AT CRAZY VOLITILE STOCKS LIKE GOOG?
If indeed you want to learn to become a trader like you posted in the other thread, I would suggest looking at less volitile stocks.
Old cliches get better not older, like: "learn to walk b4 running"
I'd wait till it hits $750.
I agree, a long put is still very risky considering google's growth potential....
By the time you quantify the volatility, momentum, and time factors for GOOG, a long term put option is very expensive. Even if you go 20 points out of the money, by the time you pay a $10-$15 premium for your contracts, you would need the wheels to come off by Jan or be out of luck.
The best time to play GOOG with options is the day of its after hours post market earnings announcement, because for some strange reason they always seem to announce a day or two days out from the friday expiration.
Here is my input. Hope it helps.
You're bearish on goog and want to do something bearish with options. You think a long put is the way to go. Let's see if you can answer the following questions and we can go from there: What's the iv for the put you're considering? What's the 2 year iv range for goog? Where in that range does your proposed put's iv fall? Are there any things coming up that may affect the stock price going up or down? What expiry month and what strike are you considering and why?
What's your max risk on the position? What's your exit strategy?
Looking forward to your answers.
where would you get the historical iv, looked at ivolatility...couldn't find what i wanted
I get historical iv from my modelling software - 'optiongear' (www.optiongear.com), which does all markets, or 'platinum' (www.optionetics.com) which covers the US market only. However, they're not free. 'Platinum' costs about $900/yr all inclusive, and OG about $3500 plus an annual data feed fee of around $500. May want to check out 'hoadley.net', I've heard it's cheaper but I don't know what they offer in terms of historical iv.
I don't have any of those programs, so stat. data is out. I was just suggesting a long put for the following reasons:
Google is at its 52 week high
Previous trends have shown downward movements before the stock has broken new highs
I heard some lawsuits are being filed against YouTube
For all the expert traders on the forum, please don't chew a piece out of my ass because I know these aren't concrete reasons to buy/sell, I just wanted to make an obervation and see what you guys though.
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