Simpler’s Take On Trading GOOGL Split
There is a great deal of buzz around the proverbial office cooler on how traders plan to play the upcoming Google stock split.
Every once in a while stocks will split, but it is a rare occurrence for a technology giant to take this action. Rarer still is several heavy-hitter companies with stock splits in the same year. So far in 2022, Shopify (SHOP), Amazon (AMZN), and now Google (GOOGL) have held a stock split.
Every trader will have their preferred way to trade a stock when it is going through the split. As the style of traders varies, so will the way that they attack the event.
What happens in a stock split?
How does a stock split work and what does this mean for the company?
A stock split is when a company decides to divide its existing stock into multiple shares to help boost liquidity. In doing so, the price of the stock can appear more attractive to the average investor.
It is important to note that the value of the stock holding will remain the same and no real value is lost or gained, despite more shares allotted. Google is set for a 20-for-1 stock split after market close on Friday and the price will be reflected at market open Monday, July 18.
Manage risk when trading stock split
Let’s take a look at how Henry Gambell, Senior Managing Director of Options Trading at Simpler Trading, plans to trade the event.
Henry mentioned in his recent live-trading session that he is looking for GOOGL to find and hold some key support levels that he has tracked on charts in his technical analysis.
Henry is focused on the scenario that GOOGL might find support, allowing fort some upside strike targets. Henry is specifically eyeing the 2500 strike for the upcoming week.
Henry also has a target to the upside that can be found in his video here. Take a look at how Henry is prioritizing protecting capital in this stock split and how he plans to exercise maximum risk management through the transition with this technology giant.