At least one trader apparently believes that Google will keep
going after a big rally in the last year.
optionMONSTER's Heat Seeker tracking program detected a large
bullish trade in the search giant, entailing the purchase of 1,000
January 2014 800 calls for $56.50 and the sale of an equal number
of January 2014 900 calls for $23. That translates into a cost of
The trade represents a $3.35 million bet that GOOG will reach $900
by early next year. If it does, the position will be worth $10
million--a profit of 199 percent. This strategy, know as a
call vertical spread
, risks much less capital than buying shares at current levels.
GOOG is trading at $768.61 this afternoon, up 1.26 percent on the
session and 29 percent in the last year. While its financial
results have been mixed, investors continue to applaud its dominant
online position and are hoping for better profit margins.
The shares are also attempting to push convincingly through their
late-2007 peak of $747. Some chart watchers may expect a continued
rally if this resistance level is broken.
Total option volume in the name so far today is already double its
full-session average, with calls outnumbering puts by almost 2 to
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.