The idea presented is the opinion of the Options Action staff and not a recommendation by OptionsPlay.
On Friday’s Options Action, the crew analyzed the performance of Alphabet. Alphabet has been in a strong bullish uptrend for 10 years but broke that trend in late 2018. Coupled with a head & shoulders formation suggests a higher risk of a move lower with earnings next week. Expecting GOOGL to trade slightly lower on earnings and volatility to collapse, Michael Khouw suggests buying a Feb/April 1110 Put Calendar for a $19 Debit. As of Friday’s close, these puts were trading at an $18.30 Debit.
We’ve structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience. You can also view the Options Action’s video by clicking on the following link: GOOGL Options Action Video