GOOGL bull put spread: credit, risk, strikes

You are still selling downside — just not all of it. The long $330 put cuts the tail off below that level, which is why this needs $795 of buying power instead of the $34,000 a cash-secured put would tie up.

Above $340 at August 28, 2026, both puts expire worthless and you keep the full $205. Below $330, you lose the maximum $795. Breakeven is $337.95.

Return on risk is 26% for 27 days — 349% annualized. That headline is the reason people prefer spreads to cash-secured puts, and the reason spreads blow up accounts: the same capital supports several times the notional risk.

Between the strikes the loss scales linearly, so most of the damage happens fast when GOOGL breaks $340. There is no assignment-and-hold escape hatch: the long put you own expires the same day.

Early assignment on the short leg leaves you long 100 shares plus a long put — a synthetic call, not a disaster, but a position you did not choose and one that requires $34,000 of cash on Monday.

Early assignment is an operational risk rather than a market one: it arrives on a weekend, converts a defined structure into a stock position, and requires cash you may have allocated elsewhere.

Thin credits, and thin for the right reason: Alphabet realizes less vol than it implies less often than its peers, so the short-premium edge is genuinely smaller here. The newly-instituted dividend also reintroduces the early-assignment calculus on ITM short calls, which covered-call writers who learned the name pre-dividend routinely forget to re-check.

GOOGL's Aug 28 strikes are $5 apart near the money (1.40% of spot). On a ladder that wide, "pick the 0.30 delta strike" resolves to whichever rung happens to be closest — sometimes not close at all. 30k contracts of open interest on Aug 28 is workable around the money and thin in the wings — width costs more here than the ladder suggests. 28 strikes on that expiry — 45% of the board — carry prints that agree with their own implied volatility and hold up across the ladder, and those are the strikes priced here. Tight and deep; a fine strike ladder makes precise strike selection genuinely possible.

Skew is inverted: the 25-delta CALL implies 2.0% more vol than the put. That is the market pricing upside risk above downside risk — a squeeze, a takeover rumour, or a crowded short. Selling calls into an inverted skew pays better than usual and is riskier than usual for exactly the same reason. The term structure is flat inside 1.5% between the two captured expiries, so there is no calendar edge to harvest and no event visibly priced into one month over the other.

At 33% ATM implied vol, the Aug 28 options are pricing a one-standard-deviation move of $31.76 over 27 days — roughly −8.9% to +8.9%, or $324.37 to $387.89. Everything the bull put spread above collects is rent on that range. If GOOGL routinely covers 8.9% in 27 days, the credit is fair compensation rather than edge.

What actually goes wrong here, as opposed to in general: Writing calls at a delta borrowed from a higher-vol name. The same 0.30 delta buys far less premium here, and the assignment odds are identical.