Go Long Alphabet Inc (GOOGL) Stock With No Money Down

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Indices are highly dependent on mega-caps like Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL) which is a good thing, since these have been on fire of late. GOOGL has been setting one new high after another with but a handful of red ticks in between. This makes entry points into the stock a daunting proposition — but not impossible, as my last GOOGL bullish trade can attest. It delivered over $2 in profits in about two weeks.

Go Long Alphabet Inc (GOOGL) Stock With No Money Down

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While I don’t expect profits to always come this fast, I book them when they do. Today I want to reset a similar setup but on a different time-frame.

Several of the platforms that I use rate GOOGL as expensive from a price-to-earnings perspective versus the industry. To me GOOGL’s stock price is big but the company is definitely not over-valued. It competes for my investment dollars with the likes of Apple Inc (NASDAQ:AAPL) and Microsoft Corporation (NASDQ:MSFT) which are all long-term winners.

I guess what I am saying is that mega caps like GOOGL are as close to a sure thing as I could get. The biggest risk I see comes from analyst expectations being too optimistic thereby elevating the risk of temporary disappointment.

So this leaves me sniping opportunistic entry points to trade GOOGL. I am conservative so risking $965 per share with no room for error is out of the question. Luckily I can use GOOGL options to build price buffers for my risks thereby eliminating the need to be surgical in my entry points.

Today I want to sell downside risk against proven support levels for the next few weeks.

GOOGL Stock Trading Advice

The Bet: Sell the GOOGL Jun $910 put and collect $2 to open. Here I have a 90% theoretical certainty that I will retain maximum gains. But if price falls below $908, I will accrue losses.


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If owning Alphabet shares is not an option, then I could turn the trade into a credit put spread to limit the risk.

Sell the GOOGL Jun $920/$917.50 bull put spread. It has a slightly smaller buffer, but if successful can yield 10% on risk. Compare this with buying Alphabet stock then need the stock to rally 10% just to match the spread performance.

Selling options is risky business so I only risk money that I am willing to lose.

Learn how to generate income from options here. Nicolas Chahine is the managing director of SellSpreads.com. As of this writing, he did not hold a position in any of the aforementioned securities. You can follow him on Twitter at @racernic and stocktwits at @racernic.

Nicolas Chahine is the managing director of SellSpreads.com.


Article printed from InvestorPlace Media, https://investorplace.com/2017/05/alphabet-inc-googl-stock-money-down/.

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