Google Stock At $289 Or $220?
Follow the whole story: every piece in this series is on our AI storyline page.
What Does Everyone Already Know?
Alphabet’s third quarter was big: revenue of $127.6 billion, up 25%, with Google Cloud more than doubling to $30.7 billion. The stock still fell about 13% the day after the Oct 28 report, as spending is growing even faster: capital spending of $195 to $205 billion this year, a significant increase planned for next year, and negative free cash flow of about $9 billion in the quarter. Wednesday it closed at $288.93, 16% lower in a month and 28% below its 52-week closing high.
What Does The Data Say?
That you don’t have to choose between “buy at $289” and “do nothing”. The fear in the market has a price, and you can sell it. Here is the trade, for one contract (100 shares), with a horizon of about 13 months (the December 2027 expiry):
| Buy 100 shares now | Sell a Dec 2027 $220 put, cash-secured | |
|---|---|---|
| Cash needed today | $28,893 | $22,000 set aside (100 × $220) |
| Paid to you today | nothing | about $1,023 ($10.23 a share) |
| Your price if you end up owning it | $288.93 | about $209.77 ($220 − $10.23), 27% below today |
The put turns “I’d buy at $220” from a wish into a contract, and pays you about 4.6% of the cash for signing it.
The premium is about $10.23 a share at Wednesday’s close (midpoint of the bid and ask) for the $220 put expiring Dec 17, 2027.
See more lines: other strikes, and the fine print
Other strikes, same expiry, at Wednesday’s close (midpoints): a $200 put pays about $6.45 and a $240 put about $15.33. The $22,000 set aside can usually earn Treasury-bill interest while it waits; the rate depends on your broker. Options trade in 100-share contracts; a buyer with a $2,900 budget (10 shares) can make the same commitment with a good-till-canceled limit order at $220, without the premium.
What Happens At Expiry?
Here is every outcome at expiry, ignoring interest and dividends:
| Alphabet at expiry (Dec 2027) | Bought 100 at $289 | Sold the $220 put |
|---|---|---|
| $350 (rally) | +$6,107 | +$1,023; you own nothing |
| Above $220 (say $240 to $299) | −$4,893 to +$1,007 | +$1,023; you own nothing |
| $200 | −$8,893 | You buy at $220; net cost $209.77; −$977 |
| $170 (a deeper fall than in 2021–22) | −$11,893 | You buy at $220; net cost $209.77; −$3,977 |
The put beats buying today at every price below about $299. Above it, you watch the rally from the side.
All figures are arithmetic on Wednesday’s midpoint premium. The $170 row is about 58% below the 52-week closing high of roughly $402, deeper than Alphabet’s ~44% fall from its 2021 peak to its 2022 low. Even there, the put seller loses far less than the buyer, because the commitment was made 24% below today’s price and paid for.
What Should You Do This Week?
If Alphabet is a stock you want to own and $220 is a price you’d be glad to pay, the steps are:
1. Size it first. Assignment means owning $22,000 of Alphabet per contract. That has to fit the full position you’d hold through a 50% fall. If it doesn’t, sell fewer contracts or use a smaller limit order.
2. Set the cash aside. Cash-secured means the $22,000 stays in the account until expiry. Never sell a put you couldn’t pay for if assigned; a naked put is a leveraged bet, not a commitment.
3. Check the quote. At Wednesday’s close the December 2027 $220 put was $10.05 bid and $10.40 ask. Quotes move every day, so use a limit order near the midpoint.
4. Write what you’ll do after. If you’re assigned, you own Alphabet at about $210 and follow your ladder. If not, you’ve earned about 4.6% on the cash plus interest, and you decide again.
What you give up: the upside if Alphabet rallies without you; above about $299 at expiry, buying today would have done better. And the risk is not hypothetical: a put doesn’t stop the stock from falling past $220. It only means you chose the price and were paid to choose it. This is education, not personal advice; options aren’t right for every account.
What’s The Bigger Idea?
We call it Commit at a price, and get paid to wait. Most investors hold a buy price in their head and then don’t act when it arrives, because by then the news is worse. A limit order or a cash-secured put moves that decision to a calm day. The premium is the market paying for your patience; the cost is owning the stock if it keeps falling. It’s one of the principles in our AI selloff guide.
If you’d be glad to own Alphabet at $220, sell the commitment instead of buying at $289. A cash-secured $220 put expiring in December 2027 paid about $10.23 a share at Wednesday’s close (midpoint of the bid and ask), for an effective entry near $209.77, 27% below today. You keep the premium if it never gets there. The price is missing a rally above about $299.
What Should You Ask Next?
- Dell fell 34% in a month. If you still believe in AI spending, what’s the plan? The same tool for a stock that’s still up 141% over 12 months.
- How much AI do you really own? Before adding Alphabet, count it in your index funds too.
- Is this 2000 or 2018? Three numbers that tell an AI bubble from a correction.
This story is still moving. Follow it with us: each answer here raises the next question, and we’ll keep answering them.
At What Price Would You Buy Your Biggest Holdings?
Corrections test concentration, not conviction. If you have $1 million or more invested, see how exposed your portfolio is to the AI trade in a free 15-minute call with a Trefis partner firm.
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