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Alphabet short-put strategies highlight 1.5% one-month yields
With GOOGL at $345.90 on Aug. 14, a 5% lower $330 put shows a 1.5% one-month yield based on a $4.95 midpoint premium for the Sept. 18 expiry.
Alphabet, Inc. shares have been drawing short-put investors, with options-market calculations pointing to relatively attractive one-month yields as GOOGL has traded in a range for about three months, Yahoo Finance reported.
The stock closed at $345.90 on Aug. 14, after moving from a July 23 trough of $317.69 to a recent Aug. 4 high of $377.65. In that range, a put strike about 5% below the stock, the $330.00 GOOGL put, was cited as offering a 1.50% one-month yield.
The analysis also pointed to analyst upside versus the current price. Yahoo Finance said 64 analysts surveyed had an average price target of $428.04, about 23.7% above the close, while Barchart’s mean survey target was $430.56.
For the Sept. 18 expiry, the article described the $330 put midpoint premium at $4.95, implying $495 of potential income on $33,000 of cash or buying power, and estimated a 26.5% rough likelihood of the stock falling to the strike based on the option delta ratio. It further suggested repeating the trade monthly to estimate an 18% expected return under the same yield assumption.