Buying GOOG call contracts.
Alphabet (GOOG) has been one of the strong megacaps that has helped propel the market higher. The company has a competitive advantage in the search and online advertising business and is very profitable.
The stock pulled back to the 200-day average during the most recent tech selloff. This should serve as support and shares are moving higher off that line.
Buying call contracts at this point gives us exposure to a quick rebound, while also giving us a clear line of support below. If this support level is breached, we can exit the position for a reasonable loss and move on to other opportunities as they evolve.
Please note, we are buying January 21st call contracts which are short-term in nature. But I expect to be in this trade only for a short rebound so it makes less sense to pay for more time premium.