Earlier, we plotted to lay in some butterfly spreads centered on the 1000 strike, since it seems entirely likely that GOOG will eventually get there. The come-to-papa approach didn’t work, however, since the stock has a habit of creating trampoline lows that are too fleeting to position-trade. However, Friday’s closing marks suggest that the September 990-1000-1010 call butterfly can be bought for close to ‘even’, and so that’s what I’ll suggest. That implies shorting two Sep 1000 calls, buying one Sep 990 and one Sep 1010 for a net debit of zero. If you have to pay as much as 0.10, though, that would be acceptable, since the spread has the potential to widen to 10.00, yielding a 100-to-1 bet. I’ve reproduced a table that shows bids and offers for the options we’re looking at. If you were to do all three sides on the ‘asked’ price, that would imply buying the ‘fly for a 0.05 debit. If you do not understand how I’ve calculated this sum, you should not attempt the trade. ______ UPDATE (August 5 at 12:13 a.m. EDT): Any fills to report? If so, please let me know in the chat room. This position, which was very do-able on Friday, would make an excellent ‘straddle’ hedge if done in conjunction with the put spread I recommended in DIA (which several of you evidently have completed).
