Alphabet’s quarterly results triggered a historic gap down in its shares, with the stock falling more than 12% to $285 and losing nearly $500 billion in market capitalization. The market focused on earnings per share of $2.12 versus the $3.02 estimate and on negative free cash flow, despite cloud revenue surging 103%. Mike Khouw suggests selling a strangle expiring December 18, 2026, to profit from time decay and a volatility contraction if GOOGL remains between $250 and $325. The main risk is a broader market sell-off pushing the stock below $250, while an upside catalyst would need to lift it above $310, considered unlikely given technical damage and investor concerns about Alphabet’s AI spending.
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