Long Straddle Google at 920 strike price for 17th Aug Expiry

Given the quarterly result on 18th July, one can consider adopting a long straddle strategy on Google which involves buying and selling of Call and Put Options of 920 strike price which are available at $30 and $28 respectively. 

Even if there is fluctuation in premiums due to stock movements one can enter both the positions with around $58 to $60 investment in mind for a possible target of $65 in next 4 days. Stop loss can be kept at around $55 and the positions should be squared of on or before 17th July EOD. 

Given the past track records of Google stock movement on result days, there are high chances of increase in Implied Volatility before results which will led to increase in premiums. It must be noted that since the lot size is 100 shares, this strategy would require an investment of around $5800 to $6000 depending on the premiums given.

Note: Since this strategy is assuming increase in premiums due to increase in IVs people should square off their position before results are announced because once the result event is over the uncertainties will will no longer be there and the IVs could fall sharply resulting in quick fall in premiums.

1 comment:

  1. Stop loss triggered. The volatility has got reduced due to flat movement in the stock since past 2 days.


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