July 25th Options Now Available For Alphabet (GOOG)

Analysis of GOOG options reveals potential strategies for investors: selling the $170 put offers a 3.24% return if it expires worthless (54% probability), effectively buying GOOG at $164.50 if assigned; selling the $175 covered call yields 5.16% if the stock is called away, but only a 2.81% return if it expires worthless (55% probability). The implied volatility of both options is around 32%, closely aligned with the stock's trailing twelve-month volatility of 31%.

Analysis

The article outlines two specific options strategies for Alphabet Inc. (GOOG) stock, currently trading at $170.97 per share. Selling a put contract at the $170.00 strike price with a bid of $5.50 could allow an investor to acquire shares at an effective cost basis of $164.50, representing an attractive entry point for those already interested in GOOG. This out-of-the-money put has a 54% probability of expiring worthless, which would yield a 3.24% return on the cash commitment, or a 23.62% annualized YieldBoost. Alternatively, for investors holding or purchasing GOOG shares, selling a covered call at the $175.00 strike price with a bid of $4.80 could generate a total return of 5.16% if the stock is called away by the July 25th expiration. If this out-of-the-money call expires worthless, an event with a 55% probability, the investor retains the shares and collects a 2.81% premium, translating to a 20.49% annualized YieldBoost, though this strategy caps upside potential above $175.00. Notably, the implied volatility for both option examples is approximately 32%, closely mirroring GOOG's actual trailing twelve-month historical volatility of 31%, suggesting the options are priced consistently with recent stock price behavior.

Key Decisions for Investors

• Investors bullish on GOOG and willing to acquire shares at a slight discount could consider selling the $170 put, targeting an effective purchase price of $164.50 or a 3.24% yield if the option expires worthless.
• Existing GOOG shareholders, or those initiating a position, might evaluate selling the $175 covered call to generate income, potentially achieving a 5.16% return if called away by July 25th, or collecting a 2.81% premium if it expires worthless, while understanding the upside limitation.
• The alignment of implied volatility (c. 32%) with historical volatility (31%) suggests these options strategies are not excessively expensive relative to recent stock movements, making them viable for consideration based on individual risk appetite and market outlook for GOOG.