Google Inc. (GOOG) announced today it would expand its services to further compete with Microsoft’s (MSFT) product line with Web-based word-processing, spreadsheet and other applications similar to Microsoft’s Office Suite.
Audio Podcast:
An audio podcast of this article is available at: poweropt.com/podcasts/2007_02_22_GOOG.mp3
Although most observers seriously doubt this poses a threat to Microsoft, who recently released critically praised Office 2007. David Kearns of Network World said in a recent article, “As I see it Microsoft has little to fear from Google in the near future. Theirs isn’t the battle of Coke vs. Pepsi, but more like Charmin vs. Cheerios – both can succeed within the larger confines of the technology supermarket.”
This offering is part of an expanding package of services Google is releasing. It started in August 2006 with the release of the first Beta versions of the free web-based tools. The first rendition included email and calendar services similar to Microsoft’s Outlook. Google claims its Apps service is now used by more than 100,000 small businesses. The company also reports General Electric (GE) to be among the subscribers to its Google Apps Premier Edition.
The Premier Edition of Google Apps will cost businesses $50 per employee account per year. This fee covers technical support and up to 10 gigabytes of data storage.
In a press release, Google touted its service saying, “Getting powerful communication and collaboration tools up and running for your organization just got a little easier. That’s because we’ve added domain registration services to Google Apps for Your Domain, a platform that allows organizations to offer tools like email and shared calendaring to all of their users — and have them all hosted by Google so there’s no hardware or software to install or maintain.”
Supposing this news made you bullish on Google and you wanted to identify the best option trades to support this notion. Below are three solid trades that might be a possibility.
Potential Trades:
All of the following option trades have 58 days until expiration. Google Inc. is currently trading at $475.86. These trades were discovered using the powerful suite of option search tools found at PowerOptions.
| Covered Call – GOOGLE INC (GOOG) $ 475.86 (58) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OPTION | Strike Info |
Opt Bid |
%Dnsd. Prot. |
%If Unch. |
%If Asgnd |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GOPDG | 07 APR $470 | $24.80 | 5.20% | 4.20% | 4.20% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GOPDI | 07 APR$480 | $19.50 | 4.10% | 4.30% | 5.20% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bull-Call Debit Spread — GOOGLE INC (GOOG) 475.86 (58) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sell Opt |
Strike Info |
Bid Price |
Buy Option |
Strike Info |
Ask Price |
% Return |
Break Even |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GOPDL | 07 APR $460 | $30.90 | GOPDH | 07 APR $440 | $45.90 | 33.30% | $455.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The first covered call trade, an in the money covered call, offers 5.2% downside protection and a potential profit of 4.2% if the stock remains unchanged or rises. The net cost of this trade, per 100 options, is $45,106.00.
The second covered call trade, an out of the money covered call, offers 4.1% downside protection and a potential profit of 4.3% if the stock remains unchanged. If the stock rises above the $480.00 strike price ($4.14 or 0.9%) the potential profit becomes 5.2%. The net cost of this trade, per 100 options, is $45,636.00.
The third trade is a bull call debit spread. This trade offers 33.3% potential profit if the stock remains above $460.00. If the stock decreases below the break-even price of $455.00 ($20.86 or 4.40%), the investment begins to lose money. If the stock price goes below the lower strike price of $440.00 ($35.86 or 7.5%), the entire investment is lost. The net cost of this trade, per 100 options, is $1,500.00.
Competitors:
Competitors for GOOG include: Yahoo! Inc. (YHOO), IAC Search & Media (private), MSN (private), Convera Corp. (CNVR), DivX Inc. (DIVX), eBay Inc. (EBAY), Infospace Inc. (INSP), Marchex Inc. (MCHX), MIVA Inc. (MIVA), Microsoft Corp. (MSFT), and Travelzoo Inc. (TZOO).
Competitors for MSFT include: Google Inc. (GOOG), International Business Machines Corp. (IBM), Oracle Corp. (ORCL), Apple Computer Inc. (AAPL), Adobe Systems Inc. (ADBE), Altiris Inc. (ATRS), Borland Software Corp. (BORL), Convera Corp. (CNVR), Citrix Systems Inc. (CTXS), DivX Inc. (DIVX), Earthlink Inc. (ELNK), Epicor Software Corp. (EPIC), Immersion Corp. (IMMR), Logitech Intl. SA (LOGI), Lawson Software Inc. (LWSN), Marchex Inc. (MCHX), McAffee Inc. (MFE), Macrovision Corp. (MVSN), Novell Inc. (NOVL), Openwave Systems Inc. (OPWV), Progress Software Corp. (PRGS), Research In Motion Ltd. (RIMM), RealNetworks Inc. (RNWK), SAP AG (SAP), Smith Micro Software Inc. (SMSI), Stellent Inc. (STEL), Sun Microsystems Inc. (SUNW), Sybase Inc. (SY), Symantec Corp. (SYMC), TiVo Inc. (TIVO), United Online Inc. (UNTD), WebEx Communications Inc. (WEBX), Wind River Systems Inc. (WIND), and Zixit Corp. (ZIXI).
For more information about how to identify and research great option trades, visit the PowerOptions website. There you will find the data you need to make quick, clear, and informed decisions. You can trade knowing you have found the best investment. Also, PowerOptions will allow you, with a few quick clicks, to quickly and accurately compare trades. PowerOptions‘ premium customer support is second to none in the industry. They can be easily contacted when you need them at their toll-free number to answer customer questions. Call them now toll free at 877-992-7971.
PowerOptions provides a free 14-day trial of its service. So join PowerOptions today, and you too can start reaping the benefits of the covered call investment strategy.
PowerOptions‘ sister company PowerOptionsApplied provides expert stock option trading recommendations. PowerOptionsApplied specializes in covered calls, naked puts and iron condor stock options strategy recommendations. PowerOptionsApplied provides a 30-day risk free trial of its service.
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