July 26, 2022

Intraday Update: GOOGL, QQQ, SPY

Two afternoon updates as indices remain weak:

  • I've been looking through GOOGL option chains to see if there was a way to turn the current Aug05 $116 - $116.50 call spread into a strangle to play earnings, but the risk to reward is making it difficult. Option pricing is elevated and the stock is down sharply over the last couple of sessions, so puts have been bid up. Instead of adding more options and more risk, the smartest thing to do is close the current call spread and wait until after earnings to potentially revisit a trade. Even though the current spread will be closed at a loss, the trade was designed using a portion of the gains of the previous bull trade, so we should still come out ahead over the past 3-4 weeks of action on GOOGL. Note: because of the split, there are 20 of the call spreads for every 1 of the initial Aug05 $2320-$2330 call spreads, so if you wanted some risk into the print, you could close a portion of the options and keep some open into the report.
  • We are going to update the QQQ and SPY hedges before earnings roll out tonight and ahead of tomorrow's FOMC rate decision:
    • The QQQ Aug19 $275 - $265 put spread will be closed and a Sep16 $290 - $280 put spread will be opened.
    • The SPY Aug19 $375 - $365 put spread will be closed and a Sep16 $385 - $375 put spread will be opened.

Open Positions

* The following Open Positions pertain to the Options In Play trade ideas from this and previous editions. Disclosure of the Trader Co-Author’s actual portfolio holdings, as of the date of each publication, is made below under "Trader Author Portfolio Holdings.".

Trader Author Portfolio Holdings

**As of the date and time of publication