Goog

[New-born baby]

Covered Call

Im just curious if you ever do this .... ie buy goog at $347 and sell Feb $350 for $6.30 which expire in 3 days . I havent done this but idea always intrigues me.

I haven't done it with GooG, but I have done it many times with other stocks. I like the short time option, esp. the covered call. If it doesn't get called away, sell next month's option.

It would be safer to buy GooG here ($344.90)and sell the Feb $330 call for $17.50--.

Remember: sometimes calls are not assigned. It is hard for me to understand, but I bought GM and it was above the strike, but never called away. The next trading day GM spiked up $1, so I got an added bonus. It has happened to me more than once.

[grebnet]

Sell In The Money ?

Do you always sell in the money vs out of the money ?
What makes selling in the $ safer ?
Are you looking at any now ?

[New-born baby]

GooG Options.

Do you always sell in the money vs out of the money ?
What makes selling in the $ safer ?
Are you looking at any now ?

In the money is much safer, though the rewards may be smaller. Here's a trade I made last month:

Bought AMLN at $43.00. Sold the Jan $40 calls for $5.00, offering me a $2 pick up with two weeks to expiration. AMLN moves up to $45 in the next couple of days, then retreats hard. Watching the action I could tell AMLN has massive resistance at $45. Spike posts a warning, and I dump her for a small profit and let the option work its way down so that I am in profit with the option, too. Subsequently AMLN has retreated all the way back to $36.

Safer: if I had held the stock at $43 purchase price, subtracting the $5 call, I would be in AMLN at $38. That beats buying AMLN at $43, selling the $45 call for $1.80, and being in AMLN at $41.20 while the stock is $36. I call this "safer."
Now if AMLN had hit the $45 strike, I would have received $45 + $1.80=$46.80, instead of $45, so I swapped possible reward for less risk.

Now to GooG: my feeling is that GooG dumps lower at expiration. You never know what is going to happen on expiration. If you love GooG, buy it and sell the calls, and if she dives down, sell next month's calls. Somehow I believe the talk that says GooG is going to see sub $300 prices before too long.

What am I doing now? I'll post my next set up on Options: Low cost investing thread. Please do the same for us

[grebnet]

Thanks

Actually I dont love , nor like GOOG. I tend to trade cheaper stocks . GOOG is priced for perfection and if they stumble at any point , it will drop further. I only used GOOG as an example because of this thread . How about a covered call thread ? Or PM me next time you do one , I want to get a handle on this.

Thanks

[DSteckler]

<< Watching the action I could tell AMLN has massive resistance at $45. Spike posts a warning, and I dump her for a small profit and let the option work its way down so that I am in profit with the option, too. >>

What is your broker's margin requirements for a naked call? Many brokerages don't allow naked call writing. Or did you buy back the call later in the same day that you sold the stock?

[New-born baby]

IB the way to go

<< Watching the action I could tell AMLN has massive resistance at $45. Spike posts a warning, and I dump her for a small profit and let the option work its way down so that I am in profit with the option, too. >>

What is your broker's margin requirements for a naked call? Many brokerages don't allow naked call writing. Or did you buy back the call later in the same day that you sold the stock?

Dave,
You ought to be with Interactive Brokers. 75 cents per option. 1 penny per share, up to 500, and 1000 shares is only $5. And naked calls allowed.

[New-born baby]

Actually I dont love , nor like GOOG. I tend to trade cheaper stocks . GOOG is priced for perfection and if they stumble at any point , it will drop further. I only used GOOG as an example because of this thread . How about a covered call thread ? Or PM me next time you do one , I want to get a handle on this.

Thanks

Sure thing, Greb. In fact, I sell covered calls often. I do not often make a naked call play. The only time I do that is when a stock is falling like a rock, and most often cover that call in one day.

[Rob]

GOOG is Cheap

IMO, a P/E of 66 is insanely cheap for a company with the growth this company has. I made good money years ago buying EBAY when its P/E was 200. Time will tell.

[DSteckler]

Years ago isn't today. GOOG is below its 200DMA for the first time ever and that is going to lead to some technical selling.

[Rob]

2 Questions

Years ago isn't today. GOOG is below its 200DMA for the first time ever and that is going to lead to some technical selling.

That raises 2 questions: How much technical selling? and How low do you see it going? With $5.02 EPS a P/E of 50 would put her in the $250 range.

You're right, years ago isn't today. It was about April or May in 2001 when I started buying EBAY. Kept it for three years and it paid off quite well. I trust you remember how the market was during those years. A dang site uglier than it is now.

Again ... time will tell.

[DSteckler]

Rob, looking at a Fib. scale of the entire price rise since the IPO, the 38.2% retracement level is right around 332, which is just about where GOOG is now. If GOOG starts trading much below 330, it could fall to the 285 - 290 range.

[alice4321us]

Goog Earnings

What are thoughts about Google's earnings tonight.

My 2 cents.

Whether GOOG hits or misses, YAHOO is going down.

GOOG HITS == YAHOO loosing market share
GOOG Misses == Search/Ad market is slowing == Yahoo's growth slows

[peanuts]

What are thoughts about Google's earnings tonight.

My 2 cents.

Whether GOOG hits or misses, YAHOO is going down.

GOOG HITS == YAHOO loosing market share
GOOG Misses == Search/Ad market is slowing == Yahoo's growth slows

I think that we will see a rally in the tech sector tomorrow. I say this because for the week, Dow Industrials and S&P 500 are up 2% and 1.5% respectively, while the tech heavy Nasdaq is lagging behind at a measily .6% for the week. It will catch up to the rest of the overall market tommorrow, and the tech giant, GOOG, will lead the way.

The search / Ad business will continue to grow for many years, regardless of what the rest of the economy is doing. This is information, not money... the desire to educate ourselves will never die down, no matter how monetarily challenged we may be.

GOOG is a member of my LT portfolio

[Rob]

GOOG is a member of my LT portfolio

Ditto.....

[spikefader]

GOOG; wow. Did that really trade down to 305?! lol

MSFT; I shorted the pop to 24.20, risking 2% to make 38%. Anyone else bearish on MSFT? I know there are some that are long based on fundies, but I've forgotten who that is...