Option Spread Portfolio - Trading Google Into June And July

May.31.12 | About: Alphabet Inc. (GOOG)

Daily Data: Google (NASDAQ:GOOG)

April-Jun Option Expiration Date Returns

May-Jul Option Expiration Date Returns

As we can see, both periods have averaged gains, and max drawdowns have been lower than max gains. With that said, July max drawdown is a 17% decline, which is about 100 points lower. A move to around 490 would be pretty drastic, but if we hit a bad spell here in June and July, it's possible. The stock increased 25% in 2005, but as we see since 2005 in both charts, the stock has not moved more than 14%. For that reason, we like a very unaggressive position in the company with an iron condor with July options.

Click to enlarge

Suggested Trade: Jul21, Iron Condor, 500/495 Bull Put Spread and 670/675 Bear Call Spread

Current Positions:

GLL - Gold has yet to break below its recent lows as long as it holds we remain good with GLL

June'15 21/22 Bull Put Spread

Price Target: Wait for spread to expire worthless

Adjust stop loss to: 0.32

Euro Shares (FXE) - We're seeing a complete breakdown in the Euro, this position is doing great.

Jun'15 131/132 Bear Call Spread

Price Target: Wait for spread to expire worthless

Stop loss to: 0.30

Apple (NASDAQ:AAPL) - Apple rallied yesterday against the market sell-off which was a great move for our position.

Jun'15 480/475 Bull Put Spread

Price Target: Wait for spread to expire worthless

Stop loss to: 1.50

DirecTV (DTV) - I'm cautious over yesterday's sell-off in Direct TV, the stock however remains in its mild long uptrend since October.

Jun'15 43/42 Bull Put Spread

Price Target: Wait for spread to expire worthless

Stop loss to: 0.22

News from: www.theflyonthewall.com

Disclosure: I do not own any investments in GOOG. I own short calendar spreads and bear call spread on GL and VXX. I own iron condors on SPY

Additional disclosure: We are short AAPL in another portfolio.

Charts are from finviz.com, tradingeconomics.com.