Easy trade on Google (GOOGL) (September 26, 2014)
GOOGL
What I want to show you here is Google ( NASDAQ:GOOGL ). The market’s been driving everybody nuts; Google ( NASDAQ:GOOGL ) is actually in a pretty well defined trading range here. So what you can do, you know this is 590.00, 610.00 so that’s like a 20 point range. So look, here’s the deal, you can trade this stock pretty easily really, low risk, you keep a stop right up underneath Thursdays intraday low and you’re anticipating this kind of move, $20.00.
Now one way you can do this though, I’m not going to show you the option chain, but this is a $587.00 stock. If you want to buy a hundred shares of that you go ahead and do the math, 58,765 actually, that’s a lot of money, or you can buy one call option for the same. What I would suggest doing, again, this is not” Free Chart of the Day” for Option Market Mentor, but what I would suggest doing is buying one call option, say the $580.00 call, so you can go like 590’s, you can do that, why don’t you buy one call of the 590 calls, October. They expire in three weeks from this last Friday on the 26th, so they expire on Friday, October 17th.
So what do you do? Well, we’re just planning on riding these puppies up about four days, maybe five days. You can say, “Well why don’t we do weekly options instead?” You can, I’m just giving you the standard contract. So you buy these 590 options, 590 call, even one of them, for a fraction of the 58 thousand that you’d have to spend when buying a hundred shares of stock, and just ride it up and when it gets up to around 600ish, into the 605.00 or so, sell that puppy and say “Thank you Dan, that’s a good strike, thank you sir, may I have another?” So that’s a trade that works. Again, as long as you use this stop as an inviolable capital risk management tactic, you’ve got to use a stop.
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