Tech Giant Alphabet Inc Makes Waves
Alphabet Inc, a tech behemoth, has been sizzling on the market turf, clocking over a 5% gain in the past month. Much of the excitement stems from the surge in demand for artificial intelligence.
Recently, the unveiling of an AI model by Sir Demis Hassabis, who heads Google AI division, promises to revolutionize research partnerships. This initiative aims at fostering interdisciplinary collaboration in research endeavors.
Adding fuel to the fire, Alphabet’s self-driving unit, Waymo, rolled out its cutting-edge sixth-gen hardware in late August. The new hardware is anticipated to enhance performance, especially in challenging winter conditions, while trimming costs. Industry forecasts predict U.S. autonomous vehicle sales touching 230,000 units by 2034.
Trading Frenzy in GOOG Stock
Trading activity in GOOG stock appears to be gaining momentum, fueled by a surge in implied volatility (IV) in the options market. Mid-September witnessed a spike in IV rank from 28% to nearly 75%, indicating investors’ expectations of significant price movements.
Amidst this trading flurry, all eyes are on Alphabet’s upcoming Q3 earnings report scheduled for October 22. While bullish sentiments dominate recent trades, market whales have been spotted engaging in bearish options trading, adding an interesting twist to the mix.
Direxion’s Strategic Play
Direxion, a financial services guru, is capitalizing on the Alphabet trading saga with its leveraged and inverse exchange-traded funds focused on GOOGL.
For the bullish souls, Direxion’s Daily GOOGL Bull 2X Shares (GGLL) aims for 200% daily returns linked to GOOGL stock performance. On the flip side, the Daily GOOGL Bear 1X Shares (GGLS) targets 100% inverse performance against Alphabet’s Class A shares.
Traders must be wary not to hold positions in GGLL and GGLS beyond a day to counter the daily compounding effect of volatility which could chip away at fund value.
A Glimpse into the ETFs’ Performance
As Alphabet’s Q3 disclosure looms, GGLL lights up the sky, boasting a whopping 23% gain since September 10. The escalating volume as the crucial date approaches is music to bullish traders’ ears. Breaking the resistance barrier at $38 could open the floodgates for fresh opportunities.
Conversely, GGLS, Direxion’s bearish bet on GOOGL, has had a rough ride in 2021, shedding roughly 19% of its value. Struggling to stay above the $14 support line, GGLS seems to be in the bear camp’s favor, especially with signs of bearish options activity and the recent bounce from the year’s low of $12.34.
Photo Credit: AS Photography on Pixabay.
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