Google Inc. (GOOGL) Traders Gamble On an Earnings Flop

Google Inc (GOOGL) will report fourth-quarter results after the bell

Digital Content Group
Jan 29, 2015 at 10:49 AM
facebook twitter linkedin


Google Inc (NASDAQ:GOOGL) is sitting 1.2% lower this morning, ahead of tonight's fourth-quarter earnings report. Meanwhile, traders are betting bearishly ahead of this event, with puts running at nearly twice the average intraday rate.

Diving into the details, the weekly 1/30 480-strike put -- GOOGL's most active option by a more than 2-to-1 margin -- is seeing some buy-to-open activity. These speculators are anticipating the shares will breach $480 by tomorrow's close (when the options expire), which would require a 5.2% from their current perch at $506.10. While this isn't out of the question, the options market is pricing in a less ambitious 4.2% post-earnings move, based on at-the-money straddle data.

Moving along, GOOGL isn't much to look at, technically speaking. Since topping out at $615.04 in late February, the shares have given back nearly 18%. Over the last few weeks, the stock has also run up against resistance at its descending 20-week moving average.

As alluded to, Google Inc (NASDAQ:GOOGL) will report quarterly results after the close, and analysts are expecting a per-share profit of $7.11 -- a more than $1 improvement over the company's year-ago result. In other news, GOOGL and VMware, Inc. (NYSE:VMW) announced a collaboration in the cloud enterprise space.

Weekly Chart of GOOGL since February 2014 with 20-Week Moving Average

 

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

 
Best stocks for October and worst stocks for October
 


 


 
Special Offers from Schaeffer's Trading Partners