Hey Trader,
The Big Tech earnings deluge continues …
With arguably the two most important names – Apple (Ticker: AAPL) and Amazon (Ticker: AMZN) taking their trip to the earnings confessional tonight.
But there’s plenty of other mega-caps who have already stepped up to the earnings mic …
And Big Money seems to be watching one in particular.
Take a look at this crafty Smart Money play …
Big Money Oogles Google
Perhaps unsurprisingly, GOOGL shares haven’t been immune to the Big Tech headwinds that have been hammering the market for most of 2022.
After a February post-earnings pop to a new all-time high (split adjusted) of $151.55, GOOGL has choppily trended downward, with the shares now seemingly stuck between $101-$119 over the last two months.
Tuesday evening saw the internet titan step up to the earnings mic … and the news was okay, with GOOGL narrowly missing revenue expectations.
In response, the shares popped 7.7% on Wednesday to close at $113.06.
So what next? Will GOOGL finally break out of its months-long sideways trading range?
Big Money says … probably not.
This trader opened 14,000 August 108/101-strike put spreads, buying the 108-strike puts for $2.07, and selling the 101’s for $0.61. They’re hoping GOOGL sheds 4.5% or more over the next three and a half weeks.
Normally, this spread would carry a price tag of $2,044,000 …
But this trader decided to take it a step further, and sell 14,000 14,000 August 116-strike calls for $1.76!
This means the trader actually netted a profit of $420,000 on this trade, which they’ll get to keep provided GOOGL doesn’t soar above $116 … which would only require an additional 2.7% increase between now and August expiration.
Their put-spread also opens them up to even more profit potential.
If GOOGL sheds its post-earnings gains before August expiration, this trader may find themselves walking away with even more money in their pocket …
In fact, should the shares drop to $101 or below, this trader will be able to pocket the maximum profit of $9,800,000, bringing their total earnings to $10,220,000.
Smart Money indeed!
Your Only Option,
Mark Sebastian