Riding Google to $540 the risk-free way using options!

Think Google (NASD: GOOG) stock may go up to $540 soon? Perhaps in one year’s time? Pretty good likelihood considering the manner in which they beat earnings estimates.

With Google currently trading at $470 a share, you can purchase an at-the-money $470 JAN ’08 put for $52 and simultaneously sell out-of-the-money $540 JAN ’08 covered call for $53.

This is a risk-free method of placing this bet and its known as a costless collar. Learn more about this strategy here.


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