Put Traders Pounce on GOOGL Stock Weakness

Weekly put traders bet on more downside from GOOGL shares

by Josh Selway

Published on Oct 9, 2018 at 10:40 AM

Alphabet Inc (NASDAQ:GOOGL) was under pressure yesterday, with the tech giant shutting down its Google+ service following a data breach. GOOGL stock fell to its lowest close since early July, and today the shares are slightly lower again at $1,154.60, amid reports the company won't pursue a $10 billion deal with the Pentagon because of changes to its ethical guidelines.

Meanwhile, options trading today has been somewhat slow, but yesterday traders were betting on downside from the FAANG stock. Specifically, it looks like heavy buy-to-open activity occurred at the weekly 10/12 1,150-strike put, which would mean traders expect GOOGL sliding below $1,150 by this Friday's close, when the weeklies expire.

Options traders typically prefer long calls over puts on the tech name. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the 10-day call/put volume ratio for Alphabet stands at 1.43 -- though even that ranks in just the 34th annual percentile.

GOOGL stock has been in a series of lower highs and lows since its July 27 record high of $1,291.44, and is now trading near its 200-day moving average. It's up 16.3% in the past year, and those buying premium along the way have seemingly done well. That is, the equity's Schaeffer's Volatility Scorecard is 88 out of 100, revealing a strong tendency to make bigger-than-expected moves on the charts.

 


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