Getting Long Google For A Discount Tuesday August 16

We’d like to welcome Andrew Keene to our community. Andrew has been an independent equity options trader on the Chicago Board of Options Exchange for the past 10 years. He spent most of that time as a market-maker in over 125 stocks, including Apple, GE, Sears Holdings, and Goldman Sachs. Currently, Andrew is actively trading futures, equity options, currency spreads and commodities.

Over the past couple of years, Andrew has become a recognized face in the media, making regular appearances on Bloomberg TV’s Street Smart, CNBC’s Squawk on the Street, nationally syndicated First Business, and CBOETV’s In the Money with Angela Miles.

Andrew is actively involved in the community and volunteers his time for numerous Chicago-area organizations. He currently serves on the Board of Directors for the Triple EEE Foundation and the East Village Youth Foundation, both of which seek to help inner city youth succeed in school and in life.

Welcome aboard Andrew, we’re looking forward to your market insights!

GOOG closed today at $539.00, off $18.23.

The Trade: I bought the Google (GOOG) September 580-600 call spread and sold the GOOG September 520-510 put spread for even money.

Profitable – I make money on this trade if GOOG closes on September 16th above $580 (with a maximum potential gain of $20).
Breakeven – If GOOG ends up closing between $520 and $580, this trade breaks even.
Unprofitable – If Google closes under $510, I will lose the maximum amount/the value of the put spread ($10).
The reason I like this trade: Due to investor concerns about yesterday’s acquisition of Motorola Mobility, Google’s stock has been hit hard — too hard in my estimation. The stock is now trading at the level it was prior to last quarter’s blowout results, giving back $90 per share (~17%) in stock value. The goal with this trade is to get long GOOG stock with limited capital. If the stock trades back above the $580 level, I make money.

Andrew R. Keene