Option Trading College

Subject: A month in the life of a put option
Instructor: The donFranko
Length: 3 sessions

Entry is Key...Exit is Everything! ^TM

Session 1 — Did you know

There are many places on the internet to get options information, advice, suggested plays and a whole lot of sizzle, but hey...where's the steak?

Well, my trading friends, I have decided to give you a daily view of the life of an option contract.

Each day I will post the opening and closing prices of four options: ITM, ATM, OTM and DOTM. We will watch how the option price is effected by the stocks movements throughout the month. I will also ad comments as we go along.

I know this will open your eyes and bring home the need for you to really consider buying ONLY options that are ITM for short-term trades.

I am going to pick a very hot and volatile stock as our example. You will get to see how it reacts to the year end rally and how the options react to their earnings announcement...this is going to be fun!

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Session 2 — Making heads or tails of an option trade

Have you ever wondered how a front-month call option reacts to day-to-day changes in the price of the underlying stock? I would venture to say you, like most options traders, have never followed the life of an option for an entire month. Most of the time we are playing a guessing game and gambling for a big score, only hoping we made a correct choice before our option expires.

I get asked multiple questions all the time like: How does an option price change? What makes it change so much? When would I know it's a good time to take a profit or cut a loss? In my other training modules I have often referred to the GREEKS, commonly called: Delta, Theta, Vega, Gamma, RHO. Each plays a pivotal point in the life of an options price movement, but you need a masters degree in abstract mathematics to figure them out on the fly. In fact, it takes a very sophisticated calculator to work out the probabilities of future prices in an options life, but that can be changed in a split second by unforeseen market forces...and greedy market makers!

So, my trading enthusiasts, I am going to keep track (for educational amusement) of the life of four call options, for the front month, from one expiration day to the next. I am going to pick a beloved stock that has a ton of volatility (Vega) and show you just how much time decay (Theta) can effect your profits and or losses. What you will find even more amazing is how much the price of the option will fluctuate (Delta) based on how much sun it gets...better known as "Gamma" radiation...lol. Now lets not forget about the horse race name RHO. Rho is the change in the options price given a one percentage point change in the risk-free interest rate. HA! There is certainly no "risk-free" opportunity when it comes to options trading. And that is what makes it so much fun...that is, if you are on the right side of the trade ;-)

Google is one of the hottest stocks over the past two years. It has very wide swings in price movement and reacts wildly to negative news, as well as positive news. The stock is extremely expensive, so millions of small investors use options to get their piece of this pie. What many/most of those investors do not realize is how dangerous trading a stock like Google can be.

I like to play Puts more than Calls because the volatility of a Put will gain bigger profits than a call. When stocks get knocked down, the Put options get fat with profits quickly!

We are going to experience the wild price swings of this stock as it approaches earnings. This year (Jan 08) they are announcing in the middle of an expiration cycle so it's going to be interesting to see what they say and what happens next.

I hope you learn valuable insight and save thousands of dollars from this great example.

We are going to pick four options to watch. I want you to see the swings in different options prices:

ITM (safest)

ATM (most expensive)

OTM (gambling)

DOTM (deep out of the money – Lottery plays)

Here are all the results for quick viewing, but be sure to look below for commentary and charts to show what really happened.

Below is a breakdown of the daily activity of these options:

Google Inc (GOOG)

Jan 18th, 2008 Close

EARNINGS: JAN 31st (after market close)

600.25 -0.54 -0.09%
After Hours: 598.30 -1.95 / -0.32% Vol. 91,131
Previous Close	600.79	Bid	594.98
Open	608.36	Bid Size	300
Day's High	609.99	Ask	604.50
Day's Low	598.45	Ask Size	100
Volume	8.54 Mil	52 Week High	747.24
Avg. Daily Vol. (13 wk.)	6.19 Mil	52 Week Low	437.00

Notice the open interest of these puts compared to the calls as we start this process. There are less speculators placing bets on DOTM puts than they are on the calls. This gives you some insight as to the sentiment and potential move. What we may find as we progress, what you see is actually NOT what you will get. Even though we see the calls are stacking up with more gambling it will go higher, often we know that the "crowd" is wrong more than they are right. This is going to a great learning lesson for you...I am very excited!

Google Inc (GOOG)

Jan 21st, 2008 Close

600.25 unch

Previous Close	600.25	Bid	594.98
Open	NA	Bid Size	300
Day's High	NA	Ask	604.50
Day's Low	NA	Ask Size	100
Volume	NA	52 Week High	747.24
Avg. Daily Vol. (13 wk.)	6.19 Mil	52 Week Low	437.00

The markets were closed today for Martin Luther King Jr.'s birthday.

Google Inc (GOOG)

Jan 22nd, 2008 Close

584.35 -15.90 -2.65%
After Hours: 570.75 -13.60 / -2.33% Vol. 36,261
Previous Close	600.25	Bid	569.50
Open	562.03	Bid Size	100
Day's High	597.50	Ask	570.75
Day's Low	561.20	Ask Size	100
Volume	9.48 Mil	52 Week High	747.24
Avg. Daily Vol. (13 wk.)	6.19 Mil	52 Week Low	437.00

OPTIONS:

====================================================================================

49.80 +8.80 +21.46%
.GOOND quote
Open	67.400	Open Interest	2,026
Bid	49.100	Previous Close	41.000
Bid Size	10	Volume	829
Ask	49.500	Day's High	68.300
Ask Size	19	Day's Low	42.000
Strike Price	620.000	Days Until Expiration	25
Expiration Date	February 16, 2008

====================================================================================

37.80 +7.40 +24.34%
.GOONT quote
Open	56.400	Open Interest	2,157
Bid	36.800	Previous Close	30.400
Bid Size	31	Volume	2,367
Ask	37.500	Day's High	56.400
Ask Size	19	Day's Low	31.400
Strike Price	600.000	Days Until Expiration	25
Expiration Date	February 16, 2008

====================================================================================

27.70 +5.87 +26.89%
.GOONP quote
Open	39.200	Open Interest	1,038
Bid	27.300	Previous Close	21.830
Bid Size	21	Volume	2,275
Ask	27.700	Day's High	44.000
Ask Size	19	Day's Low	23.800
Strike Price	580.000	Days Until Expiration	25
Expiration Date	February 16, 2008

====================================================================================

6.60 +2.50 +60.98% - CHA-CHING!
.GOPNO quote
Open	10.000	Open Interest	849
Bid	6.600	Previous Close	4.100
Bid Size	41	Volume	2,164
Ask	7.000	Day's High	10.000
Ask Size	31	Day's Low	6.100
Strike Price	500.000	Days Until Expiration	25
Expiration Date	February 16, 2008

====================================================================================

WOW! We could not get a better market to show the power of volatility than this one. Today, the Federal Reserve cut interest rates by a whopping .75 basis points. This sent the markets into a tail spin opening nearly 500 points down before rebounding nearly all of it on massive short covering and bargain hunting. Will this be the bottom for 2008? That remains to be seen. After the bell Apple announced earnings and made a hefty profit, but investors took it to the woodshed and spanked the crap out of the stock in after hours trading. I am sure this favorite will spring back as time marches on. The Apple news caused Google to slip lower in after hours. Take note the DOTM puts were up over 200% at the open!

Google Inc (GOOG)

Jan 23rd , 2008 Close

548.62 -35.73 -6.11%
After Hours: 548.89 +0.27 / +0.05% Vol. 40,942
Previous Close	584.35	Bid	548.50
Open	560.71	Bid Size	100
Day's High	568.00	Ask	548.98
Day's Low	519.00	Ask Size	100
Volume	16.90 Mil	52 Week High	747.24
Avg. Daily Vol. (13 wk.)	6.23 Mil	52 Week Low	437.00

Option Quotes:

====================================================================================

71.80 +22.00 +44.18%
GOOND quote
Open	67.800	Open Interest	1,998
Bid	75.500	Previous Close	49.800
Bid Size	23	Volume	418
Ask	76.500	Day's High	103.700
Ask Size	33	Day's Low	62.000
Strike Price	620.000	Days Until Expiration	24
Expiration Date	February 16, 2008

====================================================================================

58.30 +20.50 +54.23%
.GOONT quote
Open	52.500	Open Interest	2,300
Bid	59.700	Previous Close	37.800
Bid Size	33	Volume	1,751
Ask	60.700	Day's High	85.600
Ask Size	23	Day's Low	47.800
Strike Price	600.000	Days Until Expiration	24
Expiration Date	February 16, 2008

====================================================================================

44.40 +16.70 +60.29%
.GOONP quote
Open	40.000	Open Interest	1,381
Bid	46.100	Previous Close	27.700
Bid Size	43	Volume	2,377
Ask	47.000	Day's High	69.200
Ask Size	23	Day's Low	36.900
Strike Price	580.000	Days Until Expiration	24
Expiration Date	February 16, 2008

====================================================================================

12.90 +6.30 +95.45%
.GOPNO quote - JACKPOT!
Open	11.100	Open Interest	1,537
Bid	12.900	Previous Close	6.600
Bid Size	65	Volume	3,037
Ask	13.200	Day's High	25.000
Ask Size	8	Day's Low	9.500
Strike Price	500.000	Days Until Expiration	24
Expiration Date	February 16, 2008

====================================================================================

Another day of deluge as Google gets decimated in early market trading. Once the bottom was put in place in the overall markets, Google and others had quite a snapback rally erasing most of the losses on the day but the stock is still down a hefty amount of points heading into earnings. As you can see from the wide price swings in these calls options, you have to have an iron stomach if you trade Google.

Google Inc (GOOG)

Jan 24th , 2008 Close

574.49 +25.87 +4.72%
After Hours: 588.00 +13.51 / +2.35% Vol. 71,549
Previous Close	548.62	Bid	586.21
Open	558.80	Bid Size	100
Day's High	579.69	Ask	588.00
Day's Low	554.14	Ask Size	100
Volume	9.41 Mil	52 Week High	747.24
Avg. Daily Vol. (13 wk.)	6.39 Mil	52 Week Low	437.00

Options:

====================================================================================

52.50 -19.30 -26.88%
GOOND quote
Open	63.400	Open Interest	1,862
Bid	53.200	Previous Close	71.800
Bid Size	23	Volume	505
Ask	53.700	Day's High	65.700
Ask Size	21	Day's Low	52.500
Strike Price	620.000	Days Until Expiration	23
Expiration Date	February 16, 2008

====================================================================================

39.10 -19.20 -32.93%
.GOONT quote
Open	53.000	Open Interest	2,257
Bid	39.400	Previous Close	58.300
Bid Size	11	Volume	1,466
Ask	39.700	Day's High	53.900
Ask Size	10	Day's Low	38.000
Strike Price	600.000	Days Until Expiration	23
Expiration Date	February 16, 2008

====================================================================================

27.90 -16.50 -37.16%
GOONP quote
Open	39.100	Open Interest	1,519
Bid	28.100	Previous Close	44.400
Bid Size	11	Volume	1,458
Ask	28.600	Day's High	40.600
Ask Size	34	Day's Low	27.500
Strike Price	580.000	Days Until Expiration	23
Expiration Date	February 16, 2008

====================================================================================

5.60 -7.30 -56.59%
.GOPNO quote
Open	10.300	Open Interest	2,008
Bid	5.300	Previous Close	12.900
Bid Size	100	Volume	1,897
Ask	5.600	Day's High	11.100
Ask Size	12	Day's Low	5.300
Strike Price	500.000	Days Until Expiration	23
Expiration Date	February 16, 2008

====================================================================================

After yesterday's roller coaster ride, Google showed some love and moved back over the 200 day moving average. This is a key support area for any stock, especially a heavy weight like Google. As earnings approach next week on the 31st, many investors are starting to place their bets. There are a lot more call DOTM speculators than put buyers.

Google Inc (GOOG)

Jan 25th , 2008 Close

566.40 -8.09 -1.41%
After Hours: 568.00 +1.60 / +0.28% Vol. 21,869
Previous Close	574.49	Bid	525.00
Open	591.81	Bid Size	300
Day's High	595.00	Ask	999.99
Day's Low	566.18	Ask Size	200
Volume	6.97 Mil	52 Week High	747.24
Avg. Daily Vol. (13 wk.)	6.45 Mil	52 Week Low	437.00

Options:

====================================================================================

53.90 +1.40 +2.67%
.GOOND quote
Open	40.400	Open Interest	1,863
Bid	59.600	Previous Close	52.500
Bid Size	13	Volume	714
Ask	60.500	Day's High	57.200
Ask Size	34	Day's Low	38.400
Strike Price	620.000	Days Until Expiration	22
Expiration Date	February 16, 2008

====================================================================================

45.00 +5.90 +15.09%
.GOONT quote
Open	29.000	Open Interest	2,322
Bid	44.800	Previous Close	39.100
Bid Size	39	Volume	1,732
Ask	45.600	Day's High	45.000
Ask Size	33	Day's Low	26.900
Strike Price	600.000	Days Until Expiration	22
Expiration Date	February 16, 2008

====================================================================================

32.30 +4.40 +15.77%
.GOONP quote
Open	20.200	Open Interest	1,429
Bid	32.400	Previous Close	27.900
Bid Size	23	Volume	5,163
Ask	33.100	Day's High	32.300
Ask Size	34	Day's Low	18.400
Strike Price	580.000	Days Until Expiration	22
Expiration Date	February 16, 2008

====================================================================================

6.50 +0.90 +16.07%
.GOPNO quote
Open	3.600	Open Interest	2,273
Bid	6.300	Previous Close	5.600
Bid Size	52	Volume	2,612
Ask	6.700	Day's High	6.700
Ask Size	21	Day's Low	3.100
Strike Price	500.000	Days Until Expiration	22
Expiration Date	February 16, 2008

====================================================================================

What a week of volatility we had and what an awesome example of how options can swing wildly on a stock like Google! As you can see, if you were put buyer last week, you are a very happy camper right now and most likely should have bagged some profits! If you bought calls it's lick your wounds time and hope that this stock will get a move on next week into earnings. If you look at the DOTM puts vs. calls the call buyers are banking over 3:1 that Google pulls a rabbit out of its hat. We will see next week!

Google Inc (GOOG)

Jan 28th , 2008 Close

555.98 -10.42 -1.84%
After Hours: 553.15 -2.83 / -0.51% Vol. 9,695
Previous Close	566.40	Bid	553.15
Open	570.97	Bid Size	100
Day's High	572.24	Ask	554.69
Day's Low	548.60	Ask Size	100
Volume	5.82 Mil	52 Week High	747.24
Avg. Daily Vol. (13 wk.)	6.51 Mil	52 Week Low	437.00

Options:

====================================================================================

69.50 +15.60 +28.94%
.GOOND quote
Open	61.500	Open Interest	1,805
Bid	68.700	Previous Close	53.900
Bid Size	41	Volume	117
Ask	69.500	Day's High	74.200
Ask Size	22	Day's Low	61.500
Strike Price	620.000	Days Until Expiration	19
Expiration Date	February 16, 2008

====================================================================================

53.20 +8.20 +18.22%
.GOONT quote
Open	42.700	Open Interest	2,448
Bid	52.800	Previous Close	45.000
Bid Size	62	Volume	499
Ask	53.900	Day's High	58.000
Ask Size	52	Day's Low	42.700
Strike Price	600.000	Days Until Expiration	19
Expiration Date	February 16, 2008

====================================================================================

40.00 +7.70 +23.84%
.GOONP quote
Open	34.100	Open Interest	2,469
Bid	39.200	Previous Close	32.300
Bid Size	20	Volume	901
Ask	39.800	Day's High	43.000
Ask Size	22	Day's Low	31.700
Strike Price	580.000	Days Until Expiration	19
Expiration Date	February 16, 2008

====================================================================================

8.90 +2.40 +36.92%
.GOPNO quote
Open	6.200	Open Interest	2,652
Bid	8.200	Previous Close	6.500
Bid Size	13	Volume	2,230
Ask	8.600	Day's High	9.600
Ask Size	42	Day's Low	5.700
Strike Price	500.000	Days Until Expiration	19
Expiration Date	February 16, 2008

====================================================================================

Not much action today but showing no love going into earnings this week. Volume was light and in after hours it traded down which does not bode well for call players at the moment. Put players just keep getting richer with this stock.

Google Inc (GOOG)

Jan 29th , 2008 Close

550.52 -5.46 -0.98%
After Hours: 551.89 +1.37 / +0.25% Vol. 71,656
Previous Close	555.98	Bid	549.01
Open	560.47	Bid Size	100
Day's High	561.33	Ask	550.00
Day's Low	540.67	Ask Size	100
Volume	6.15 Mil	52 Week High	747.24
Avg. Daily Vol. (13 wk.)	6.55 Mil	52 Week Low	437.00

Options:

72.75 +3.25 +4.68%
.GOOND quote
Open	65.400	Open Interest	1,825
Bid	71.400	Previous Close	69.500
Bid Size	20	Volume	124
Ask	72.900	Day's High	81.000
Ask Size	10	Day's Low	65.400
Strike Price	620.000	Days Until Expiration	18
Expiration Date	February 16, 2008

55.70 +2.50 +4.70%
.GOONT quote
Open	50.300	Open Interest	2,426
Bid	54.900	Previous Close	53.200
Bid Size	20	Volume	331
Ask	56.500	Day's High	65.000
Ask Size	20	Day's Low	49.400
Strike Price	600.000	Days Until Expiration	18
Expiration Date	February 16, 2008

41.80 +1.80 +4.50%
.GOONP quote
Open	36.950	Open Interest	2,729
Bid	40.600	Previous Close	40.000
Bid Size	22	Volume	2,867
Ask	41.900	Day's High	49.200
Ask Size	10	Day's Low	36.700
Strike Price	580.000	Days Until Expiration	18
Expiration Date	February 16, 2008

8.80 -0.10 -1.12% <============NOTICE!
.GOPNO quote
Open	7.700	Open Interest	2,888
Bid	8.500	Previous Close	8.900
Bid Size	57	Volume	1,676
Ask	9.100	Day's High	11.800
Ask Size	44	Day's Low	7.500
Strike Price	500.000	Days Until Expiration	18
Expiration Date	February 16, 2008

Great lesson on what happens to DOTM options. Even though Google went down today, these options actually lost money? Huh? That's right, they lost because they have zero intrinsic value and the MM can do whatever he pleases with the price. Even though the open interest increased the price still ended down for the day.

So far, Google is looking weaker heading into earnings. If they disappoint like Yahoo did, this stock could take a serious beating and our puts would catapult to new highs. I find it suspect these DOTM puts actually showed weakness today...hmmm...could be a sign to GET IN!

Google Inc (GOOG)

Jan 30th , 2008 Close

548.27 -2.25 -0.41%
After Hours: 546.49 -1.78 / -0.32% Vol. 7,990
Previous Close	550.52	Bid	545.00
Open	549.19	Bid Size	100
Day's High	560.43	Ask	546.48
Day's Low	543.51	Ask Size	100
Volume	7.92 Mil	52 Week High	747.24
Avg. Daily Vol. (13 wk.)	6.54 Mil	52 Week Low	437.00

Options:

====================================================================================

76.60 +3.85 +5.29%
.GOOND quote
Open	72.000	Open Interest	1,869
Bid	75.400	Previous Close	72.750
Bid Size	31	Volume	306
Ask	76.600	Day's High	79.500
Ask Size	43	Day's Low	66.650
Strike Price	620.000	Days Until Expiration	17
Expiration Date	February 16, 2008

====================================================================================

56.20 +0.50 +0.90%
.GOONT quote
Open	56.500	Open Interest	2,427
Bid	58.500	Previous Close	55.700
Bid Size	41	Volume	547
Ask	59.500	Day's High	63.300
Ask Size	33	Day's Low	51.300
Strike Price	600.000	Days Until Expiration	17
Expiration Date	February 16, 2008

====================================================================================

43.50 +1.70 +4.07%
.GOONP quote
Open	41.600	Open Interest	2,704
Bid	43.400	Previous Close	41.800
Bid Size	20	Volume	1,835
Ask	44.300	Day's High	48.000
Ask Size	21	Day's Low	37.800
Strike Price	580.000	Days Until Expiration	17
Expiration Date	February 16, 2008

====================================================================================

9.00 +0.20 +2.27%
.GOPNO quote
Open	9.400	Open Interest	3,129
Bid	8.600	Previous Close	8.800
Bid Size	20	Volume	2,606
Ask	8.800	Day's High	11.500
Ask Size	10	Day's Low	7.300
Strike Price	500.000	Days Until Expiration	17
Expiration Date	February 16, 2008

Tomorrow is the big day when Google announces earnings after the close. There are more puts being bought than calls which could mean a surprise and massive short covering rally. Now that the Federal Reserve has lowered interest rates .500, things could get exciting tomorrow and Friday. Tomorrow is month end and I am suspect that Google will beat and the shorts will cover massively. We shall see.

Google Inc (GOOG)

Jan 31st , 2008 Close

564.30 +16.03 +2.92%
After Hours: 525.00 -39.30 / -6.96% Vol. 900,294
Previous Close	548.27	Bid	524.72
Open	539.01	Bid Size	300
Day's High	573.00	Ask	524.95
Day's Low	534.29	Ask Size	200
Volume	14.78 Mil	52 Week High	747.24
Avg. Daily Vol. (13 wk.)	6.56 Mil	52 Week Low	437.00

Options:

====================================================================================

64.55 -12.05 -15.73%
.GOOND quote
Open	84.800	Open Interest	1,875
Bid	64.400	Previous Close	76.600
Bid Size	11	Volume	487
Ask	66.100	Day's High	85.900
Ask Size	10	Day's Low	56.000
Strike Price	620.000	Days Until Expiration	16
Expiration Date	February 16, 2008

====================================================================================

49.00 -7.20 -12.81%
.GOONT quote
Open	65.200	Open Interest	2,401
Bid	49.100	Previous Close	56.200
Bid Size	11	Volume	860
Ask	50.000	Day's High	70.700
Ask Size	1	Day's Low	41.000
Strike Price	600.000	Days Until Expiration	16
Expiration Date	February 16, 2008

====================================================================================

36.70 -6.80 -15.63%
.GOONP quote
Open	50.700	Open Interest	2,019
Bid	36.500	Previous Close	43.500
Bid Size	22	Volume	1,494
Ask	37.700	Day's High	53.400
Ask Size	10	Day's Low	30.300
Strike Price	580.000	Days Until Expiration	16
Expiration Date	February 16, 2008

====================================================================================

7.20 -1.80 -20.00%
.GOPNO quote
Open	10.800	Open Interest	3,833
Bid	7.000	Previous Close	9.000
Bid Size	6	Volume	8,527
Ask	7.300	Day's High	13.600
Ask Size	1	Day's Low	5.800
Strike Price	500.000	Days Until Expiration	16
Expiration Date	February 16, 2008

====================================================================================

Google announced earnings and missed analysts expectations. The stock was rocking during the day then plummeted nearly $60 bucks into the close and after earnings were announced. Tomorrow will be pivotal for the next few months as the stock finds bargain hunters or it continues the wholesale slaughter in its share price. Should the stock drop, the puts will BANK and we still have two weeks to expiration!

Google Inc (GOOG)

Feb 1st , 2008 Close

515.90 -48.40 -8.58%
After Hours: 516.79 +0.89 / +0.17% Vol. 2,799
Previous Close	564.30	Bid	464.00
Open	528.67	Bid Size	100
Day's High	536.67	Ask	567.00
Day's Low	510.00	Ask Size	200
Volume	17.60 Mil	52 Week High	747.24
Avg. Daily Vol. (13 wk.)	6.69 Mil	52 Week Low	437.00

====================================================================================

97.90 +33.35 +51.67%
.GOOND quote
Open	86.670	Open Interest	1,762
Bid	104.100	Previous Close	64.550
Bid Size	25	Volume	547
Ask	105.200	Day's High	110.100
Ask Size	25	Day's Low	84.600
Strike Price	620.000	Days Until Expiration	14
Expiration Date	February 16, 2008

====================================================================================

79.00 +30.00 +61.22%
.GOONT quote
Open	70.900	Open Interest	2,389
Bid	84.400	Previous Close	49.000
Bid Size	45	Volume	576
Ask	85.300	Day's High	89.000
Ask Size	11	Day's Low	64.900
Strike Price	600.000	Days Until Expiration	14
Expiration Date	February 16, 2008

====================================================================================

62.30 +25.60 +69.75%
.GOONP quote
Open	53.600	Open Interest	2,210
Bid	65.200	Previous Close	36.700
Bid Size	45	Volume	1,332
Ask	66.000	Day's High	71.000
Ask Size	35	Day's Low	49.100
Strike Price	580.000	Days Until Expiration	14
Expiration Date	February 16, 2008

====================================================================================

10.00 +2.80 +38.89%
.GOPNO quote
Open	7.100	Open Interest	6,250
Bid	9.700	Previous Close	7.200
Bid Size	10	Volume	9,312
Ask	10.100	Day's High	15.200
Ask Size	42	Day's Low	5.500
Strike Price	500.000	Days Until Expiration	14
Expiration Date	February 16, 2008

====================================================================================

MONSTER HOME RUNS ON THE PUTS - Notice the wide price swings, but still a huge winning day for the down side and we still have two weeks to go until expiration.

Google Inc (GOOG)

Feb 4th , 2008 Close

495.43 -20.47 -3.97%
After Hours: 493.10 -2.33 / -0.47% Vol. 56,374
Previous Close	515.90	Bid	480.00
Open	509.07	Bid Size	100
Day's High	512.78	Ask	504.99
Day's Low	492.55	Ask Size	300
Volume	13.16 Mil	52 Week High	747.24
Avg. Daily Vol. (13 wk.)	6.89 Mil	52 Week Low	437.00

===================================================================================

124.35 +26.45 +27.02%
.GOOND quote
Open	112.000	Open Interest	1,687
Bid	122.900	Previous Close	97.900
Bid Size	49	Volume	45
Ask	124.500	Day's High	124.350
Ask Size	11	Day's Low	112.000
Strike Price	620.000	Days Until Expiration	12
Expiration Date	February 16, 2008

====================================================================================

104.00 +25.00 +31.65%
.GOONT quote
Open	93.520	Open Interest	2,309
Bid	103.600	Previous Close	79.000
Bid Size	21	Volume	199
Ask	104.400	Day's High	107.200
Ask Size	11	Day's Low	89.000
Strike Price	600.000	Days Until Expiration	12
Expiration Date	February 16, 2008

====================================================================================

84.20 +21.90 +35.15%
.GOONP quote
Open	72.880	Open Interest	2,116
Bid	83.900	Previous Close	62.300
Bid Size	31	Volume	436
Ask	84.600	Day's High	87.400
Ask Size	10	Day's Low	70.810
Strike Price	580.000	Days Until Expiration	12
Expiration Date	February 16, 2008

====================================================================================

17.40 +7.40 +74.00% <=====KaCHING!$$!
.GOPNO quote
Open	12.200	Open Interest	5,988
Bid	17.300	Previous Close	10.000
Bid Size	126	Volume	8,763
Ask	17.700	Day's High	20.200
Ask Size	1	Day's Low	11.000
Strike Price	500.000	Days Until Expiration	12
Expiration Date	February 16, 2008

The deluge keeps coming as Micro-softie flexes some muscle and puts in a bid for Yahoo. With their megabucks, Google can now face some tough competition in the future, and a high flying stocks price is solely based on future earnings power. The puts are BANKING now, but will we get a bargain hunting reversal starting tomorrow?

Google Inc (GOOG)

Feb 5th , 2008 Close

506.80 +11.37 +2.29%

Previous Close	506.80	Bid	504.50
Open	489.43	Bid Size	100
Day's High	509.00	Ask	515.00
Day's Low	488.52	Ask Size	100
Volume	11.20 Mil	52 Week High	747.24
Avg. Daily Vol. (13 wk.)	6.96 Mil	52 Week Low	437.00

===================================================================================

112.60 -11.75
.GOOND quote
Open	NA	Open Interest	1,355
Bid	NA	Previous Close	112.600
Bid Size	NA	Volume	NA
Ask	NA	Day's High	NA
Ask Size	NA	Day's Low	NA
Strike Price	620.000	Days Until Expiration	10
Expiration Date	February 16, 2008

==================================================================================

92.04 -11.96
.GOONT quote
Open	NA	Open Interest	1,808
Bid	NA	Previous Close	92.040
Bid Size	NA	Volume	NA
Ask	NA	Day's High	NA
Ask Size	NA	Day's Low	NA
Strike Price	600.000	Days Until Expiration	10
Expiration Date	February 16, 2008

====================================================================================

73.40 -10.80
.GOONP quote
Open	NA	Open Interest	1,937
Bid	NA	Previous Close	73.400
Bid Size	NA	Volume	NA
Ask	NA	Day's High	NA
Ask Size	NA	Day's Low	NA
Strike Price	580.000	Days Until Expiration	10
Expiration Date	February 16, 2008

===================================================================================

11.00 -6.40
.GOPNO quote
Open	NA	Open Interest	6,501
Bid	NA	Previous Close	11.000
Bid Size	NA	Volume	NA
Ask	NA	Day's High	NA
Ask Size	NA	Day's Low	NA
Strike Price	500.000	Days Until Expiration	10
Expiration Date	February 16, 2008

====================================================================================

As I suspected last night, Google managed a snap back rally (albeit a small one) today putting on some green in the midst of a really red day on both indices. This could be shorts taking some profits and if yesterdays low does not hold it's going to be UGLY for the longs and SWEET for the puts!

Google Inc (GOOG)

Feb 6th , 2008 Close

501.71 -5.09 -1.00%
After Hours: 495.00 -6.71 / -1.34% Vol. 77,733
Previous Close	506.80	Bid	494.25
Open	511.14	Bid Size	100
Day's High	511.17	Ask	496.50
Day's Low	497.93	Ask Size	200
Volume	7.64 Mil	52 Week High	747.24
Avg. Daily Vol. (13 wk.)	7.00 Mil	52 Week Low	437.00

117.80 +5.20 +4.62%
.GOOND quote
Open	119.600	Open Interest	1,326
Bid	117.100	Previous Close	112.600
Bid Size	1	Volume	59
Ask	118.400	Day's High	120.000
Ask Size	11	Day's Low	114.900
Strike Price	620.000	Days Until Expiration	10
Expiration Date	February 16, 2008

98.21 +6.17 +6.70%
.GOONT quote
Open	91.100	Open Interest	1,168
Bid	97.100	Previous Close	92.040
Bid Size	45	Volume	55
Ask	98.400	Day's High	100.000
Ask Size	10	Day's Low	91.100
Strike Price	600.000	Days Until Expiration	10
Expiration Date	February 16, 2008

77.90 +4.50 +6.13%
.GOONP quote
Open	72.900	Open Interest	1,778
Bid	77.200	Previous Close	73.400
Bid Size	1	Volume	66
Ask	78.500	Day's High	79.900
Ask Size	10	Day's Low	72.900
Strike Price	580.000	Days Until Expiration	10
Expiration Date	February 16, 2008

12.50 +1.50 +13.64%
.GOPNO quote
Open	9.700	Open Interest	6,085
Bid	12.200	Previous Close	11.000
Bid Size	29	Volume	8,397
Ask	12.800	Day's High	14.600
Ask Size	30	Day's Low	9.100
Strike Price	500.000	Days Until Expiration	10
Expiration Date	February 16, 2008

sellers step back in as more selling pressure hits the markets. The big loser today was the CME which dropped over $100 bucks today! WOW - The DOTM puts banked today!

Google Inc (GOOG)

Feb 7th , 2008 Close

504.95 +3.24 +0.65%
After Hours: 505.05 +0.10 / +0.02% Vol. 923
Previous Close	501.71	Bid	505.03
Open	496.86	Bid Size	100
Day's High	514.19	Ask	505.99
Day's Low	494.76	Ask Size	100
Volume	7.93 Mil	52 Week High	747.24
Avg. Daily Vol. (13 wk.)	6.99 Mil	52 Week Low	437.00

===================================================================================

113.00 -4.80 -4.07%
.GOOND quote
Open	111.600	Open Interest	1,282
Bid	114.300	Previous Close	117.800
Bid Size	31	Volume	2,681
Ask	115.100	Day's High	115.570
Ask Size	11	Day's Low	110.100
Strike Price	620.000	Days Until Expiration	9
Expiration Date	February 16, 2008

==================================================================================

96.80 -1.41 -1.44%
.GOONT quote
Open	101.200	Open Interest	1,110
Bid	94.300	Previous Close	98.210
Bid Size	31	Volume	62
Ask	95.200	Day's High	101.200
Ask Size	11	Day's Low	89.800
Strike Price	600.000	Days Until Expiration	9
Expiration Date	February 16, 2008

==================================================================================

75.70 -2.20 -2.82%
.GOONP quote
Open	79.100	Open Interest	1,503
Bid	74.300	Previous Close	77.900
Bid Size	31	Volume	168
Ask	75.200	Day's High	82.500
Ask Size	11	Day's Low	68.600
Strike Price	580.000	Days Until Expiration	9
Expiration Date	February 16, 2008

====================================================================================

9.90 -2.60 -20.80%
.GOPNO quote
Open	14.500	Open Interest	6,420
Bid	9.800	Previous Close	12.500
Bid Size	1	Volume	8,523
Ask	9.900	Day's High	14.700
Ask Size	10	Day's Low	6.350
Strike Price	500.000	Days Until Expiration	9
Expiration Date	February 16, 2008

Bouncing around at the $500 support area but with very little conviction. Notice the large swings in the opitons prices intra-day. As I said in my commentary, you have to have an iron stomach when you play options, even if they are in the money.

Google Inc (GOOG)

Feb 8th , 2008 Close

516.69 +11.74 +2.32%
After Hours: 516.69 unch / unch Vol. 58,253
Previous Close	504.95	Bid	516.10
Open	509.41	Bid Size	500
Day's High	517.73	Ask	516.80
Day's Low	508.70	Ask Size	200
Volume	6.83 Mil	52 Week High	747.24
Avg. Daily Vol. (13 wk.)	6.85 Mil	52 Week Low	437.00

====================================================================================

.GOOND quote

105.80 -7.20 -6.37%

Open

106.900

Open Interest

1,136

Bid

103.400

Previous Close

113.000

Bid Size

10

Volume

28

Ask

104.300

Day's High

107.000

Ask Size

10

Day's Low

104.200

Strike Price

620.000

Days Until Expiration

8

Expiration Date

February 16, 2008

====================================================================================

.GOONT quote

86.90 -9.90 -10.23%

Open

85.900

Open Interest

1,075

Bid

83.400

Previous Close

96.800

Bid Size

21

Volume

90

Ask

84.300

Day's High

87.400

Ask Size

10

Day's Low

84.400

Strike Price

600.000

Days Until Expiration

8

Expiration Date

February 16, 2008

===================================================================================

65.10 -10.60 -14.00%
.GOONP quote
Open	68.700	Open Interest	1,276
Bid	63.400	Previous Close	75.700
Bid Size	31	Volume	202
Ask	64.200	Day's High	68.700
Ask Size	11	Day's Low	64.200
Strike Price	580.000	Days Until Expiration	8
Expiration Date	February 16, 2008

====================================================================================

4.80 -5.10 -51.52%
.GOPNO quote
Open	8.000	Open Interest	6,780
Bid	4.800	Previous Close	9.900
Bid Size	61	Volume	8,491
Ask	5.100	Day's High	8.200
Ask Size	76	Day's Low	4.500
Strike Price	500.000	Days Until Expiration	8
Expiration Date	February 16, 2008

Google moved on up today as the $500 support areas continues to hold ground. The stock closed near the highs of the day which could be a good thing heading into option expiration next week. Notice how

the DOTM puts where cut literally in half today. It will be interesting to see how these play out next week.

Google Inc (GOOG)

Feb 8th , 2008 Close

521.16 +4.47 +0.87%
After Hours: 520.20 -0.96 / -0.18% Vol. 17,503
Previous Close	516.69	Bid	520.20
Open	520.52	Bid Size	100
Day's High	523.71	Ask	520.50
Day's Low	513.40	Ask Size	100
Volume	5.82 Mil	52 Week High	747.24
Avg. Daily Vol. (13 wk.)	6.78 Mil	52 Week Low	437.00

Options:

===================================================================================

103.00 -2.80 -2.65%
.GOOND quote
Open	103.500	Open Interest	1,147
Bid	98.300	Previous Close	105.800
Bid Size	49	Volume	6
Ask	99.200	Day's High	103.500
Ask Size	33	Day's Low	103.000
Strike Price	620.000	Days Until Expiration	5
Expiration Date	February 16, 2008

===================================================================================

82.50 -4.40 -5.06%
.GOONT quote
Open	79.600	Open Interest	634
Bid	78.400	Previous Close	86.900
Bid Size	21	Volume	20
Ask	79.200	Day's High	84.000
Ask Size	33	Day's Low	79.600
Strike Price	600.000	Days Until Expiration	5
Expiration Date	February 16, 2008

===================================================================================

59.00 -6.10 -9.37%
.GOONP quote
Open	58.900	Open Interest	808
Bid	58.400	Previous Close	65.100
Bid Size	39	Volume	53
Ask	59.000	Day's High	66.200
Ask Size	22	Day's Low	57.000
Strike Price	580.000	Days Until Expiration	5
Expiration Date	February 16, 2008

===================================================================================

2.60 -2.20 -45.83%
.GOPNO quote
Open	3.900	Open Interest	6,662
Bid	2.500	Previous Close	4.800
Bid Size	81	Volume	3,937
Ask	2.700	Day's High	4.900
Ask Size	108	Day's Low	2.350
Strike Price	500.000	Days Until Expiration	5
Expiration Date	February 16, 2008

===================================================================================

Nothing going on today. It's shaping up to be a very boring expiration week but anything can happen so time will tell as we watch the action develop.

Google Inc (GOOG)

Feb 12th , 2008 Close

518.09 -3.07 -0.59%
After Hours: 517.75 -0.34 / -0.07% Vol. 7,537
Previous Close	521.16	Bid	517.02
Open	523.39	Bid Size	400
Day's High	530.60	Ask	517.75
Day's Low	513.03	Ask Size	200
Volume	6.66 Mil	52 Week High	747.24
Avg. Daily Vol. (13 wk.)	6.70 Mil	52 Week Low	437.00

Options:

======================================================================================

103.70 +0.70 +0.68%
.GOOND quote
Open	91.400	Open Interest	1,146
Bid	101.600	Previous Close	103.000
Bid Size	11	Volume	12,509
Ask	102.200	Day's High	103.700
Ask Size	31	Day's Low	91.400
Strike Price	620.000	Days Until Expiration	4
Expiration Date	February 16, 2008

======================================================================================

78.00 -4.50 -5.45%
.GOONT quote
Open	78.000	Open Interest	607
Bid	81.400	Previous Close	82.500
Bid Size	48	Volume	2,423
Ask	82.200	Day's High	78.000
Ask Size	31	Day's Low	71.800
Strike Price	600.000	Days Until Expiration	4
Expiration Date	February 16, 2008

======================================================================================

62.70 +3.70 +6.27%
.GOONP quote
Open	56.200	Open Interest	789
Bid	61.600	Previous Close	59.000
Bid Size	21	Volume	1,555
Ask	62.200	Day's High	66.900
Ask Size	28	Day's Low	51.200
Strike Price	580.000	Days Until Expiration	4
Expiration Date	February 16, 2008

======================================================================================

2.20 -0.40 -15.38%
.GOPNO quote
Open	2.000	Open Interest	6,607
Bid	2.300	Previous Close	2.600
Bid Size	27	Volume	5,041
Ask	2.400	Day's High	3.200
Ask Size	21	Day's Low	1.000
Strike Price	500.000	Days Until Expiration	4
Expiration Date	February 16, 2008

======================================================================================

Slipping into expiration and these calls will be expiring worthless. These puts are FAT with profit s and should stay that way!

Google Inc (GOOG)

Feb 13th , 2008 Close

534.62 +16.53 +3.19%
After Hours: 543.00 +8.38 / +1.57% Vol. 335,244
Previous Close	518.09	Bid	540.70
Open	522.50	Bid Size	100
Day's High	534.99	Ask	543.99
Day's Low	518.69	Ask Size	100
Volume	6.63 Mil	52 Week High	747.24
Avg. Daily Vol. (13 wk.)	6.68 Mil	52 Week Low	437.00

Options:

=====================================================================================

85.50 -18.20 -17.55%
.GOOND quote
Open	97.800	Open Interest	1,057
Bid	85.200	Previous Close	103.700
Bid Size	55	Volume	1,311
Ask	86.100	Day's High	97.800
Ask Size	11	Day's Low	85.500
Strike Price	620.000	Days Until Expiration	3
Expiration Date	February 16, 2008

=====================================================================================

66.00 -12.00 -15.38%
.GOONT quote
Open	78.400	Open Interest	300
Bid	65.200	Previous Close	78.000
Bid Size	64	Volume	30
Ask	66.100	Day's High	79.840
Ask Size	11	Day's Low	66.000
Strike Price	600.000	Days Until Expiration	3
Expiration Date	February 16, 2008

=====================================================================================

45.80 -16.90 -26.95%
.GOONP quote
Open	57.500	Open Interest	572
Bid	45.300	Previous Close	62.700
Bid Size	44	Volume	45
Ask	46.200	Day's High	60.100
Ask Size	11	Day's Low	45.800
Strike Price	580.000	Days Until Expiration	3
Expiration Date	February 16, 2008

=====================================================================================

0.35 -1.85 -84.09%
.GOPNO quote
Open	1.360	Open Interest	6,064
Bid	0.350	Previous Close	2.200
Bid Size	45	Volume	4,274
Ask	0.400	Day's High	1.600
Ask Size	101	Day's Low	0.350
Strike Price	500.000	Days Until Expiration	3
Expiration Date	February 16, 2008

=====================================================================================

Nice day in the markets lifted Google from the basement of a big sell off. Notice now the DOTM puts were shellacked.

Google Inc (GOOG)

Feb 14th , 2008 Close

532.25 -2.37 -0.44%
After Hours: 532.75 +0.50 / +0.09% Vol. 1,808
Previous Close	534.62	Bid	532.50
Open	538.35	Bid Size	200
Day's High	541.04	Ask	533.49
Day's Low	531.00	Ask Size	500
Volume	6.48 Mil	52 Week High	747.24
Avg. Daily Vol. (13 wk.)	6.65 Mil	52 Week Low	437.00

Options:

=====================================================================================

86.20 +0.70 +0.82%
.GOOND quote
Open	80.500	Open Interest	1,054
Bid	87.700	Previous Close	85.500
Bid Size	19	Volume	21
Ask	88.500	Day's High	86.600
Ask Size	29	Day's Low	80.500
Strike Price	620.000	Days Until Expiration	2
Expiration Date	February 16, 2008

=====================================================================================

66.60 +0.60 +0.91%
.GOONT quote
Open	60.500	Open Interest	281
Bid	67.700	Previous Close	66.000
Bid Size	30	Volume	11
Ask	68.400	Day's High	66.600
Ask Size	29	Day's Low	60.500
Strike Price	600.000	Days Until Expiration	2
Expiration Date	February 16, 2008

=====================================================================================

45.30 -0.50 -1.09%
.GOONP quote
Open	43.000	Open Interest	257
Bid	47.700	Previous Close	45.800
Bid Size	19	Volume	18
Ask	48.500	Day's High	45.500
Ask Size	29	Day's Low	42.600
Strike Price	580.000	Days Until Expiration	2
Expiration Date	February 16, 2008

=====================================================================================

0.05 -0.30 -85.71%
.GOPNO quote
Open	0.350	Open Interest	7,060
Bid	0.050	Previous Close	0.350
Bid Size	44	Volume	1,226
Ask	0.100	Day's High	0.350
Ask Size	6	Day's Low	0.050
Strike Price	500.000	Days Until Expiration	2
Expiration Date	February 16, 2008

=====================================================================================

As the expiration comes Google slips and notice how the DOTM puts actually go down?? Open interest grew too as speculators jockey for position in hopes that Google will miraculously drop over $32 bucks and give them a profit....it could happen right?

Google Inc (GOOG)

Feb 15th , 2008 Close OPTION EXPIRATION DAY

529.64 -2.61 -0.49%
After Hours: 530.20 +0.56 / +0.11% Vol. 7,530
Previous Close	532.25	Bid	520.50
Open	528.31	Bid Size	100
Day's High	532.66	Ask	535.00
Day's Low	524.33	Ask Size	100
Volume	5.24 Mil	52 Week High	747.24
Avg. Daily Vol. (13 wk.)	6.58 Mil	52 Week Low	437.00

Options:

=====================================================================================

92.70 +6.50 +7.54%
.GOOND quote
Open	89.400	Open Interest	1,059
Bid	90.200	Previous Close	86.200
Bid Size	5	Volume	21
Ask	90.800	Day's High	94.900
Ask Size	24	Day's Low	89.400
Strike Price	620.000	Days Until Expiration	0
Expiration Date	February 16, 2008

=====================================================================================

74.50 +7.90 +11.86%
.GOONT quote
Open	73.780	Open Interest	279
Bid	70.200	Previous Close	66.600
Bid Size	5	Volume	15
Ask	70.800	Day's High	74.500
Ask Size	29	Day's Low	73.780
Strike Price	600.000	Days Until Expiration	0
Expiration Date	February 16, 2008

=====================================================================================

50.80 +5.50 +12.14%
.GOONP quote
Open	49.300	Open Interest	256
Bid	50.200	Previous Close	45.300
Bid Size	5	Volume	53
Ask	50.800	Day's High	55.000
Ask Size	40	Day's Low	48.000
Strike Price	580.000	Days Until Expiration	0
Expiration Date	February 16, 2008

=====================================================================================

0.05 unch
.GOPNO quote
Open	0.050	Open Interest	6,748
Bid	NA	Previous Close	0.050
Bid Size	NA	Volume	273
Ask	0.050	Day's High	0.100
Ask Size	105	Day's Low	0.010
Strike Price	500.000	Days Until Expiration	0
Expiration Date	February 16, 2008

=====================================================================================

Expiration brings this training to a close. We had a very good run on the put side, and 3 out of 4 of the plays finished very profitable! Did you notice how the DOTM puts expired worthless? Even when things go your way, if you are too far from the action, you can still lose everything! Timing is critical when trading opitons, and as I always say, "Entry is Key....Exit is Everything!^TM"

Profits Up!

The donFranko

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