Adding to My Google Modified Synthetic Long at the 200

As always, not financial advice but I wanted to take a moment to let you know what I did at the close of trading on Friday. I am adding to my Google modified synthetic long positions.

When I originally placed my first trade on Google, I really wanted it  - but it was not quite at the level I would want to load up at. We were trading at support, but I always suspected we might retest the 200 moving average. So I have been waiting to load.

We are there now. Close enough. Good enough. I would be splitting hairs if I tried to wait for perfection.

Why do I say that? This is my favorite chart. It’s a 4-hour IADSS chart set to extended trading hours. I have a -2.5 mean reversion. We are sitting on a prior support level, closing in on the 200 moving average, which to me is a phenomenal support for any stock or ETF.

This for me is my entry. The market left me breadcrumbs and I followed them. Let me show you what I did  - first in the DOM, and then on the whiteboard.

The Trade: Selling the 280/240 Put Spread

I am choosing to sell the 280/240 put spread on Google. Here is how I came up with those strikes: I want a 50% credit for the width of the spread. The spread is $40 wide, so I am looking for $20. I got $19 which is close enough for me.

So I am selling the 280 put and buying the 240 put. That $19 credit? I am going to take it and apply it towards buying an in-the-money call. My goal is always to buy an in-the-money call that is 50/50 intrinsic and extrinsic. I am satisfied with the 240 call because I like the breakeven of this trade.

Here is what the full modified synthetic long looks like:

• Sell December 2028 280 put

• Buy December 2028 240 put

• Buy December 2028 240 call

• Combined debit: $72

Let me show you on the whiteboard why this math works so well...