Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Gersh's Option trades -- Ignore unavailable to you. Want to Upgrade?

To: Mark Johnson who wrote (620)	10/12/2007 11:23:55 AM
From: Mark Johnson	Read Replies (1) \| Respond to of 652

Here is a fun one........ GOOG options.... Stock has been on a terror, this one definiately reminds me of MSFT in the good ol days. I like the idea of shorting the deep out of the money calls before earnings. I really think it will run up until earnings but it is hard to tell exactly at this point because the stock has run up so much. Cramer just put a $750 target on GOOG, which means the small investors are hoarding in. What that means is that after earning come out, the stock will most likely drop and take a sell off (I think may happen but it is of course not guaranteed) because all the good news is being factored in before earnings. The million dollar question is, "how high will GOOG go before earnings?". My rule of thump is to cover any short (when shorting call options) that doubles in price. I really don't think GOOG will hit $750, but ya never know. If it runs to $700 a day or 2 before earnings, it would really make sense to sell short the Oct $770 or $800 call options like crazy, assuming that the market makers will issue those strike prices. I don't see a lot of upside in the short term but if GooG keeps going up I expect a sell off after earning and that's why I like shorting the deeper out of the money calls with the October strike price. So, what I like right now is shorting the OCT $750 calls around $1. If they double in price, cover the short and load up on shorting the near $800 strike price calls 50 to 80 points out of the money right (assuming they are issued by the market makers) before earnings are released. Good luck option shorters!!!!