As I always say, the difference between a good trader and a great trader is looking at each trade as how much you can lose not how much you can make. I like this Google Inc. (GOOG) trade because it pays 2:1 on my money, and I also have a fair amount of time until December expiration.

BACKGROUND

GOOG has been a strong performer in 2013, with shares up over 17 percent on the year. The stock traded at high of around $915 per share around on May 15, prior to pulling back below $860.  Shares would rally again to $924.69 on July 15th, only to pull back to current levels.

THE CHART

Technically, the stock looks poised to make another run past $900, but more importantly are the solid fundamentals which Google has working in its favor.  With a forward P/E of 16.5 and a profit margin of around 21 percent, the stock is reasonably valued.  But most importantly, they have what is arguably (and what I believe) is the most innovative consumer product in the tech market today —Google Glass.

Google Glass, the controversial eyewear which is not yet fully available to consumers, is the most recognized piece of wearable technology today.  While Samsung recently announced the Galaxy Gear, which will be the first mass produced Smart Watch, such a device is unlikely to resonate with consumers or the enterprise in the same way as Glass.  The true value of Glass will lay in its enterprise applications — imagine doctors being able to see a patient chart without a clipboard or having to look away from the operating table.  While Apple established itself early on as the de-facto gold standard in mobile (not to detract from Android), Google has done this in wearable technology with Glass.

While Glass is only a small portion of what Google does, it is indicative of continued innovation at the search giant.  Recently, the NFL confirmed Commissioner Roger Goodell had met with Google personnel to discuss the broadcast of out-of-market football games on Youtube. 

MY TRADE

Buy the GOOG Dec 900-925 Call Spread for $7.80.

Risk: $820 per 1 Lot

Reward: $1680 Per 1 Lot

Break-even: $908.20

GREEKS OF THIS TRADE

Delta: Long

Gamma: Long

Theta: Short

Vega: Long