GOOGL 12/1 125 Short Put

People are gonna think I’m a shill for tastytrade, but as far as I’m concerened, they’re the Motley Fools of the retail option trading community.

This is a trade idea from TP from his Cherry Bomb newsletter.


The Dept of Justice has figured out what the rest of us have known for years – that GOOGL dominates the internet because it’s the world’s default search engine. What surprises me is that the DOJ says that GOOGL has only about 50% of US searches. I thought it would be more. Either way, searches turn into advertising dollars, and that’s been driving the company’s profits. That success is translating into a strong stock price. GOOGL has been rising lately, outperforming the broader market. GOOGL’s OTM calls are trading over equidistant OTM puts, indicating that the market sees risk to the upside. That might be enough for a trader to consider a bullish strategy in it. Despite the rising stock price, GOOGL’s IV has been climbing, too, with earnings coming next week. And its 32% overall IV and 40% IV rank make GOOGL’s options good candidates for short premium trades. If you think GOOGL might keep rallying or at least not fall back too far in the next few weeks, and are willing to take risk through earnings, the short 125 put in the Dec weekly expiration with 45 DTE is a bullish strategy that has a 90% prob of making 50% of its max potential profit before expiry, and that generates $4.29 of positive daily theta.

I’m bullish on GOOGL. This morning I got lucky and was able to open a trade before the bounce up and entered @ $1.71.

IV Rank: 40
IV: 32%
DTE: 45
Delta sold: -0.17
Theta: $4.29/day
BPR: $-1,255 (IBKR)

Exit strategy: take profit at 50% or close the trade at 21DTE.

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GOOGL taking it on the chin today.

I bought back the short put for 3.32 for a total loss -$161.

Google’s up +40% YTD. Even though I’m bullish on GOOGL, there’s too much risk to the downside right now.