Google, Inc. Credit Spread (NasdaqGS: GOOG)
TheOptionPlayer.com recommends a Google (GOOG) short-term (7-day) option strategy. Investors could simultaneously:
Sell the July one week expiration GOOG $625 call for $1.48 (yesterday's closing price)
Buy the July one week expiration $630 call at $.98 (yesterday's close)
The difference between funds received and paid out is a .50 credit which we keep if Google closes below $625 on July 13th, but immediately exit the position if it appears the price will end up higher. See Guidelines page at www.theoptionplayer.com/ for explanation on how trade is set up.
Why we recommend it:
(NasdaqGS:GOOG ) stock price surged higher over past week as technology shares led the market's recent up-tick. Despite the fact that Google stock hitched a ride higher with tech shares the recent big news about the company is mostly negative and might put a lid on a further rise. Investors might be wondering about Google's top-line growth prospects when it announces earnings on July 12th.
As indicated in the daily chart below, Google stock is well below the target price and has not been near that level since the stock market was at its mid-May high point. At the very least there is a high probability that the price will remain below the $625 target for another week.
52-Week High: $670.25
52-Week Low: $480.60
Average Volume (3 month): 2,596,300