[Options] Positioning for $GOOG to Play Catchup
But first, here's the trend in implied volatility for $GOOG:
As you can see, $GOOG vol is near its lowest level of the past six months. This makes buying long calls with a good amount of time to expiration highly attractive.
Here's the Play:
I like buying $GOOG December 120 calls for approximately $6.00 per contract. This debit we pay today is the most we can lose. But we're going to lean against a nearby support level to act as our trigger to take risk off the table.
If $GOOG sees a close below $103 per share, that's my signal to get out. I'm early or wrong, which to me is the same thing. We can always reassess after the smoke clears and get back in if it sets up again.
Meanwhile, as I often do with simple long call positions, I'll look to sell half of my position if I can sell half of my calls for double what I paid today. This removes all of my original risk capital from the trade while allowing me to participate in a market melt-up back toward highs. Uncapped profit potential is the way to play moves like that.
If you have any questions on this trade, please send them here.
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