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Day Traders, Swing Traders, Long-Term Investors

Monday, April 7, 2014

Festival of Traders & Trading Google after the Stock Split

1.    You are Invited to the Festival of Traders
Lean powerful trading techniques used by professional traders:
Tuesday April 8 and Wednesday April 9, 2014
4:00 – 7:00 p.m. Eastern Time each day. Use one sign up to enjoy the entire event totally free:
The NeverLossTrading presentation is on April 9 at 6:15 p.m. ET

2.    Making Complicated Matters Simple
What does the Google stock split mean for your trading?
With the stock split on March 27th, the Google share price was roughly halved and from now on, we have two trading tickers with roughly the same numbers of shares exchanged per day.
GOOG:  Even so the prior ticker symbol was carried forward; GOOG represents the newly issued Class-C share with no voting rights. As a result, historic data are only reaching back to 3/27/2014.So far, this symbol does not carry weekly options; however, at the basis of monthly options , at our preferred strike prices, GOOG had a 5-times higher option volume than GOOGL this far.
GOOGL:  The new issued symbol relates to the prior existing Class-A share with voting rights, which carries all historic data, reaching back to August 2004. Weekly options are issued. So far GOOGL had the lower option volume.
GOOGL 4-Hour NeverLossTrading HF Chart

If you are a Google shareholder, your account was updated as follows:
Say you held 100 Class-A Google shares. At one vote per share, that entitles you to 100 votes. After the stock split, you now hold 100 Class-A shares with the symbol GOOGL and 100 Class-C shares with the Symbol GOOG. Class-A shares keep their one vote, while Class-C shares have none. So while your number of shares doubled to 200, you still have 100 votes.
A super-voting Google Class B share also exists, however, it does not represent a stock we have to worry about as traders: The Class-B shares secure the control of the Google founders who hold 56% of the voting rights. By now being in the position from now on to only issue Class-C shares with no voting rights, the Google founders basically put a floor to keep the control of the company.
In the trading days since March 27, 2014, both shares showed a unilateral share price development, when we assume this continues, we are acting as follows:
·         For day trading weekly options use GOOGL (all history).
·         For position trading, use monthly options use GOOG (historic date from March 27, 2014 forward).

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