17-10-07 : Option strategy for GOOG tonite

We decided earlier that we are bearish on GOOG tonite. Thus we now wish to prepare the right option to enter tonite, to capture this opportunity.

Choices we have are :
(1) Straight Nov 600 Put (OTM) : $21
(2) Straight Oct 620 Put (ITM) : $18.80
(3) Bear call spread Sell 630 Call, buy 640 Call : $11.25 - $8.10 = $3.15
Return = 3.15 / [(640-630)-3.15] = 46% return (> 25% is acceptable)
(4) Straight Nov 620 Put (ITM) : $30.50 (too expensive)

With these choices in mind, I decided to put all 4 choices to the test. We will see the results of these 4 choices tomorrow.

One thing to notice is the price fluctuation of the 2 straight Puts. Their graphs are as below :

(1) Straight Nov 600 Put (OTM)
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Range : $11-$24 ($13)



(2) Straight Oct 620 Put (ITM)
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Range : $9-$25 ($16)