Trade Google Stocks This Way to Get 80% Return

Do you dream about creating a passive income from buying blue-chip stocks like Google?

But GOOGL costs $2000 per share which is difficult to allocate your assets and manage risks.

We will show you how to trade Google with less Buying Power and get a great return.

Why Trade Google Stocks?

Google is the world's most popular search engine, with 92% of the global market share for search. We are so used to browsing the internet through Google as the first step, its name is synonymous with the verb search.

Google and its parent company Alphabet provide a lot of hardware, software and cloud services that we use almost every day, so we expect GOOGL to continue to rise in value over time.

GOOGL Price Trends Over the Past Year

Google's stock price continued to climb at a steady pace during the past year, similar to other blue-chip companies in the S&P 500 index, such as FAANG stocks, Facebook, Apple, Amazon and Netflix.

But GOOGL has risen to around $2100 per share, making it a big stock that is difficult to make investment risks with asset allocation.

We need a way to trade GOOGL with minimum Buying Power to maintain a good asset allocation while having a high Return on Capital (ROC).

How to Increase Leverage Without Increasing Risk

If we monitor the Bollinger Bands on Google's stock price, we notice right now the IV is high due to wider Bollinger Bands. So this is a good time to sell options for a high premium, then we can close the trade in the future when IV falls.

Since we cannot be 100% sure whether Google will rise or fall in the short term, we can use the options screener to define an Iron Condor that is profitable if the underlying doesn't experience a huge move:

• Sell a $1950 Put and a $2190 Call to define a profitable price range
• Buy a $1940 Put and a $2200 Call to set a limit our maximum loss

This trade has around 50% Probability of Profit, and requires $555 Buying Power for $445 premium, with 80% ROC.

If GOOGL remains within the range of our strike prices after a month and a half, the 4 options will expire worthless, and we collect all the premium.

Trading an Iron Condor on TD Ameritrade

If we visit the Trade tab inside TD Ameritrade, we can choose the options that expire next month, and sell an Iron Condor at $1950.

Fine tune the trade settings:

• SELL $1950 Put
• SELL $2190 Call
• BUY $1940 Put
• BUY $2200 Call

Finally change the contract Qty to 1 and analyse the trade.

This trade has around 50% Probability of Profit, and requires $555 Buying Power for $445 premium, with 80% ROC.

If GOOGL remains within the range of our strike prices after a month and a half, the 4 options will expire worthless, and we collect all the premium.

But any experienced option trader knows that we don't hold onto the options until it expires, but close them early:

• After you reach 50% profit
• Or when we are down to 14 days to expiration

So you can maximise your chance of profit with minimum risk.

If we compare trading stocks versus trading an Iron Condor, we see that stocks have only 50% chance of profit, and it requires a large upward price move to have a high return.

Strategies	Market direction	Probability of profit	Maximum return	Cost of trade (or buying power)
Stocks	Upward	50%	Depends on size of upward move	$2,100
Iron Condor	No matter rise or fall (stay within the range of strike prices)	48.27%	80%	$555

Trading an Iron Condor gives you more room for profit without being correct on the direction of stock movement, as long as the stock price stays within your strike prices, you can collected up to 80% Return on Capital.

If the trade goes wrong, we can roll up or down to repair the Iron Condor and minimise our losses.

Trading options only requires 1/4 of the Buying Power of buying shares, making it easier to manage your portfolio.

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