Google (GOOG) options are actively traded ahead of earnings. Shares are up $6.50 to $555 and 166,000 options contracts traded on the Internet search giant. 55,000, or one-third, of the volume is in the Weekly options that expire after tomorrow. The top trade is a 425-lot of Weekly 575 calls, which are 3.6 percent OTM, at $9.70 when the market was $9.50 to $10. The next biggest trade in Google is 315 Dec 530 calls at $49.60 and possibly a liquidating trdae. An Oct 560 – 580 call spread was apparnetly bought for $6.80, 255X about six minutes into tradeing with the stock 1.2 percent below current levels. The next largest trades in Google today appear to be part of an Iron Butterfly in the Weeklys and traded in afternoon action. For example, the Weekly 560 straddle was sold at $37.58 and the 545 – 575 strangle bought for $24.08, 250X. So, the spread was initiated for $13.50 and seems to be a bet that shares will hold around $560 through the expiration; i.e. not much post-earnings volatility tomorrow. It traded 750X and data indicate and opening position. Meanwhile, implied volatility in GOOG options is up about 2.5 percent to 46. (First Posted at 13:55 ET)
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Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.