Like the Amazon trade, Google has not behaved or participated in the very short Santa Claus rally. However, this one has found a significant support level at 86 and I’m not sure switching it to a negative trade would benefit the position. We are going to reposition the position lower and try to bring in additional credit on the put spread.
As you may recall our debit on this trade was only 0.50. Because of the width of the put spread that means our Max risk in the trade was 4.50. We are going to have to add a little debit to the trade to fix this, but if Google stays flat or moves up at all we can recover about a third of the trade in two weeks. From there we can manage it to either break even or a smaller loss.
This will be a two-part trade. Close the existing position and then open the new position.
Alphabet Inc. (GOOGL): 87.44
TRADE ACTION 1: CLOSE the GOOGL 6 Jan (23) 96 call and the 20 Jan (23) 99 call for a net credit of around 0.10 to 0.15
BTC the GOOGL 6 Jan (23) 96 call
STC the GOOGL 20 Jan (23) 99 call
TRADE ACTION 2: CLOSE the GOOGL 20 Jan (23) 94 put and the 20 Jan (23) 99 put for a net debit of around 4.70
BTC the GOOGL 20 Jan (23) 99 put
STC the GOOGL 20 Jan (23) 94 put
TRADE ACTION 3: OPEN the GOOGL 17 Feb (23) 95 put and the GOOGL 17 Feb (23) 90 put for a net credit of around 3.10 to 3.15
BTO the GOOGL 17 Feb (23) 90 put
STO the GOOGL 17 Feb (23) 95 put
TRADE ACTION 4: OPEN the GOOGL 17 Mar (23) 85 call and the GOOGL 13 Jan (23) 87 call for a net debit of around 5.00 to 5.10
BTO the GOOGL 17 Mar (23) 85 call
STO the GOOGL 13 Jan (23) 87 call
The Master Portfolio is trading 5 contracts.