Mike Khouw's Alphabet Options Trade

Mike Khouw recommended on CNBC's "Options Action" a stock recovery strategy in Alphabet Inc GOOGL.

He explained that investors with a long stock position should use the strategy when they want to make more money back than they lost in a recent decline. He added that the strategy requires relatively small amount of additional capital and it is good to use it when the stock doesn't look good technically.

Khouw wants to buy the July 950 call for $12.10 and sell two July 975 calls for $4.90 each. The options structure would cost him $2.3 and it is going to make money, if the stock jumps above $952.30 at the July expiration.