After a strong run, Alphabet Inc (GOOG) is now pressing into extended territory. Last week’s bearish divergence on the daily chart has already played out, leaving momentum indicators stretched. RSI continues to hover above 70, highlighting overbought conditions.
📉 Extended move. Upside requires unusual acceleration.
Setup Selection
The chosen short strike at $222.5 sits comfortably above current price and would require GOOG to surge more than 6% in just four trading days — a move that would mark fresh all-time highs. With momentum fading and the MACD divergence already signaling caution, the probability of such a sharp extension appears low.
This setup isn’t a call for an immediate reversal. Instead, it follows the system’s rule: enter at the 10-delta level, where the market would need an extreme and unlikely push to challenge the position.
Premiums remain solid thanks to elevated implied volatility, allowing for a balanced reward-to-risk structure.
Why Bear Call Spread?
→ Defined risk
→ Premium aligned with 10-delta entry
→ No need for a drop — just avoid a sudden breakout
The trade benefits as long as price fails to accelerate into uncharted territory.
Trade Structure
Expiration: August 29, 2025
Short Call: 222.5
Long Call: 227.5
Contracts: 16
Credit Received: $0.30 per contract
Target Profit (net before fees): $480
👉 View on OptionStrat
👉 View in Trade Log
Entry and Exit Plan
Position opened Monday, August 25, with strikes set at fresh all-time high levels.
→ If GOOG remains capped below $222.5 and most of the premium is captured ahead of expiration, I’ll look to close early rather than hold through Friday.
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Disclaimer
All content is for informational purposes only and does not constitute financial advice.Any trades or strategies should be tested in a simulated environment before use.Trading involves risk, and all decisions are the sole responsibility of the reader.