Why I'm Selling Puts Into the Google Selloff

Welcome back to The Options Desk. This is the series where I walk through real trades I am evaluating, in real time, using the tools on the Wealth Engine Pro platform. Some of these trades I take. Most of them I do not. The point is not the outcome. The point is the process: how to use the scanner, how to read the data, and how to know when a high premium is worth taking. Last time I walked away. This time I am putting the trade on.

The Scan

I run the Put Option Scanner most mornings, but I do not only use it to hunt for the fattest premium on the board. Sometimes a name is already on my radar and I pull it up to see what its puts are paying. This was one of those mornings. Alphabet had been all over the headlines, so I went looking.

The setup I care about for a name like this is simple: a monthly contract roughly six weeks out, a strike a few percent below the current price, and a next earnings date that falls after expiration. That last filter is the one I never skip. I do not want to be short a put through an earnings print. With Alphabet trading in the low $360s after its selloff, the July 17 put at the $345 strike, 43 days out, was paying $5.30.

The capital required to secure that put is $34,500. The $530 in premium is about 1.5% on that capital over 43 days, which annualizes to roughly 13%. Here is the honest part: that is not a huge number. The scanner's own benchmarks show the S&P 500 at 20.7% annualized, the Nasdaq 100 at 25.8%, and the platform average across all symbols at 33.9%. By that yardstick, 13% is below average. So why did it stop me?

Because Alphabet's options are normally quieter than this. A blue-chip megacap does not usually pay you 13% annualized to sell a put 5% out of the money. The premium was elevated, and it was elevated for one specific reason. That is the opposite of the ABVX trade I walked through last time, where a 316% annualized premium was screaming that something dangerous was about to happen. Here the premium was only modestly inflated, on a company I would actually want to own. The scanner gave me the number. The news page told me why the number existed.

The Dig

On June 2, Alphabet priced one of the largest equity raises in the history of public technology. The story behind the premium is the story of that raise, and it is worth getting the details right, because the market's first reaction and the actual facts are not the same thing.

The Raise

Alphabet priced an $84.75 billion equity capital raise, upsized from the $80 billion it had announced just a day earlier after demand overwhelmed the original terms. The package has several pieces: about $18 billion in Class A and Class C common stock (priced at $355.20 and $351.80 per share), $16.75 billion in mandatory convertible preferred stock carrying a 6.25% dividend, a $40 billion at-the-market program to be sold over time, and a $10 billion private placement with Berkshire Hathaway. The money is earmarked for one thing: capital expenditures to scale AI infrastructure and compute. Goldman Sachs, which led the deal, called the size unprecedented territory for capital markets. The market's response was to sell. Alphabet fell about 4.6% over two trading days as the headlines fixed on the word dilution.

The Dilution Math

So how much dilution is this, really? Against a market capitalization of roughly $4.3 trillion, the full raise is a little under 2%. The banker who priced it called that very manageable, and on the math he is right. The stock issued immediately is the roughly $18 billion of common plus Berkshire's $10 billion. The $40 billion ATM trickles into the market over time rather than all at once. Alphabet also entered capped call transactions that push the effective dilution cap to a price about 50% above the offering, a structure companies use when they want to limit share issuance and signal they expect the stock higher.

There is a fair question buried in here, and I am not going to dodge it. Alphabet is one of the most cash-rich companies on earth and could have raised this with debt at almost no cost. A company that has spent years buying back its own stock choosing instead to issue $85 billion of it is worth pausing on, because firms tend to sell equity when they think shares are fully priced, not cheap. That cuts against the bull case. What cuts the other way is the use of proceeds and the structure: this is money going into compute to meet demand the company says it cannot currently serve, with a dilution-limiting hedge attached. Both things are true at once. The dilution is small, and the choice to use equity is a signal worth respecting rather than ignoring.

The Berkshire Signal

This is the part that moved me from interested to willing. Berkshire Hathaway ended the first quarter sitting on a record $397.4 billion in cash and short-term Treasuries, up from $373 billion at the end of 2025 and past its prior peak. It did not get there by accident. Berkshire has been a net seller of stocks for years, including well over $100 billion sold in 2024 alone, sold another $8.1 billion net in the first quarter of 2026, and let its own buybacks sit dormant for 21 months. The standard reading of that cash pile is caution: the most patient investor in the world looking at the market and finding almost nothing worth buying.

That is exactly why this matters. A buyer who has been saying no to nearly everything for three years said yes to Alphabet. Berkshire tripled its Alphabet stake on the open market earlier in the year while it was net-selling everything else, and then anchored another $10 billion in this raise. Greg Abel, who took over from Warren Buffett at the start of 2026, is now doubling down on what has become one of his largest positions. ARK bought the dip the same week. When the most valuation-disciplined buyer alive makes an exception this size, the exception is the signal.

I want to be precise about what that signal is and is not, because it is easy to over-read. Ten billion dollars is only about 2.5% of Berkshire's cash pile, and Berkshire is still overwhelmingly in cash and still a net seller overall. This is a targeted, high-conviction bet on Alphabet specifically, not Berkshire turning bullish on the stock market. And it is a valuation signal, not a timing one. It tells me a great long-term buyer thinks Alphabet is attractively priced for a multi-year hold. It does not promise the stock cannot fall next month. For a put seller who actually wants the shares, that is the right way to lean on it.

The Window

Two dates make this particular trade clean. Alphabet's next earnings report is confirmed for July 28, which falls after my July 17 expiration. There is no earnings binary inside the window, which is the same filter that mattered so much in the ABVX trade. And the $40 billion ATM program, the one piece of the raise that adds ongoing supply, does not begin until the earlier of that earnings date or 60 days after the prospectus, meaning late July at the soonest. About $30 billion of that ATM is earmarked for employee equity tax obligations rather than a fresh capital grab. In plain terms, the supply overhang everyone is worried about is a second-half-of-2026 story. It does not touch a put that expires on July 17.

It also helps that the underlying business is not in question. Last quarter Alphabet grew revenue 22% to $109.9 billion, with Google Cloud up 63% and operating margins above 36%. The company raised full-year capital spending guidance to $180 to $190 billion and pointed to a cloud backlog that nearly doubled. The raise is not plugging a hole. It is funding demand. That is the kind of company I am comfortable being assigned.

The Trade

So I am selling the July 17 $345 put for around $5.30. Here is the whole case in one line: last time the premium was high because of a binary I could not underwrite, and this time the premium is elevated because of a financing event that is already public, already digested, mechanically small, and underwritten by two of the most disciplined investors in the market. This is a high premium for a reason I want to be paid for.

The margin of safety is what makes it work. My breakeven is $339.70, the strike minus the premium I collect. The offering priced common stock at $355.20, which is roughly where Berkshire's money went in. If this trade goes the way the market fears and I am assigned, I end up owning Alphabet at about 4% below the price the anchor investor just paid out of a cash pile he will not spend on anything else. The bad outcome is owning a company I want, cheaper than Berkshire got it.

The cushion backs that up. With the stock in the low $360s, the strike sits roughly 5% below the market and my breakeven about 6% below it. Alphabet can drift down around 6% over the next 43 days and I still do not lose money at expiration. If it simply holds or moves sideways, the put expires worthless and I keep the $530.

Now the risks, because the entire point of this desk is that the premium has to pay you for them. The cushion is real, but it is roughly one bad news-week. Alphabet just moved 4.6% in two days on the raise, so the strike is about one of those moves away. A broad selloff in AI and technology names would drag Alphabet through my strike regardless of how strong the company is, and there is a live catalyst for exactly that: the SpaceX initial public offering is expected on June 12, a deal large enough to move sentiment across the whole sector. And the question hanging over every name in this space, Alphabet included, is whether this scale of AI capital spending will earn its cost of capital. None of those risks is a scheduled binary sitting inside my 43 days, which is the difference from ABVX, but they are real, and the modest premium is honest about that. Thirteen percent annualized is a fair yield, not a windfall.

That is the trade. I am not being paid a fortune. I am being paid a reasonable yield to set a disciplined buy order on a business I want to own, at a price below where Berkshire just bought, with no earnings and no new supply inside the window. If the stock stays up, I keep the premium and do it again. If I am assigned, I own Alphabet at $339.70 and start selling covered calls against it. Assignment is not the trade failing. It is the trade working.

That is the philosophy behind the Wealth Engine Pro platform: let the data lead, not the premium, not the headline, not the fear. The scanner surfaced the premium. The filings explained why it exists. Last time the data told me the premium was a trap and I walked away. This time it tells me the premium is a temporarily mispriced invitation to own a great business at a discount. Same discipline, opposite verdict.