How I Hedged $600K GOOG position for (Almost) Free with Options

I worked at Google for nine years and my Google shares accumulated, quietly, one vesting date at a time.

Overtime, those grants compounded into about 50% of my entire portfolio. It's my best performing "investment", but the concentration risk is too high to ignore. One antitrust headline, one soft earnings print, one “AI-bubble is bursting” week, and a chunk of my net worth evaporates.

Without a high-paying corporate job, my goal is to compound my existing capital steadily and protect downside risk. So I knew I have to be responsible about my capital and hedge.

Hedging a position is like buying an insurance - it incurs a cost. But I wanted to do it for as close to free as possible — no meaningful cash out of pocket.

This is the post I wish I'd read before I started: the problem, the options I considered, and the exact structure I landed on — a collar built from a six-month GOOG Put combines with a short three-months GOOG Call.

If you're a tech employee (or ex-employee) sitting on a pile of vested RSUs or ESPP shares in a single ticker, this is written for you. The idea works the same whether your badge said Google, Nvidia, Meta, or Amazon.

Some housekeepings before we dive in:

1. I'm not your financial advisor, and this isn't financial advice. It's my story and the mechanics behind it. Options can lose you money in creative new ways. Do your own homework.
2. Follow your company rules. Most companies disallow employees from hedging via stock options. Check your employment contracts!
3. Double-check tax implications. I am based in Singapore and there is no capital-gain tax when I sell my shares. More on this later.

The problem: I didn't want to sell, but I couldn't relax

The obvious move to reduce concentration risk is just to sell some. Trim, book the gain, diversify, sleep at night.

Three things stopped me — and they'll sound familiar if you hold employer stock:

1. Long-term conviction. I spent nine years there. I still believe in the company and ALPHABET is a serious long term contestant in the AI Race.
2. Tax and cost basis. I'm in Singapore, where there's no capital gains tax, so selling wouldn't cost me a cent — a real luxury most readers don't share. (If you're a US taxpayer, your vested RSUs were already taxed as income at vesting, so you only owe gains on the appreciation since — but on a nine-year run that can still be a huge bill, and it changes the math.)
3. My real fear was concentration, not direction. I am not bearish on GOOG. I was concerned on the concentration risk. I would like to continue participate in the upside of GOOG but I have to protect my portfolio during a drawdown due to the concentration.

That last point matters more than any other. If your problem is "I think it'll fall," you hedge the price. If your problem is "too many eggs, one basket" — which is exactly what employer stock becomes — the cleanest fix is fewer eggs. A hedge buys you time and protection; it doesn't cure concentration. I went in with clear eyes about which problem I was actually solving.

What I wanted: cap the crash risk on my shares without selling them and without paying an insurance premium that quietly bleeds my returns. Here's the menu I worked through to get there.

The menu of hedges (with the analogies to help explain)

Buy a protective put. A put is the right to sell at a set price — a hard floor. Analogy: fire insurance on your house. Keeps all your upside, but the insurance loses value every single day towards the expiry date. Great protection, not free.

Sell a covered call. You sell someone the right to buy your shares higher, and pocket a premium. Analogy: renting out a room. Nice income, caps your upside — but it does protect your downside. Not a hedge on its own.

The collar. Combine the two: buy the protective put, and pay for it with the premium from selling the call. Analogy: you insure the house against fire and pay the whole insurance bill with the rent from the room you let out. Protection, funded by giving up some upside. This is the one I chose — details below.

Put-spread collar. Cheapen the put by selling a lower put underneath it. Cheaper (sometimes a credit), but you reopen a tail below that lower strike.

Stock replacement with Long dated Calls. Sell the shares, replace them with a long-dated deep-in-the-money call. Analogy: sell the house but keep a cheap long-term option to buy it back. Frees a lot of capital and caps downside (maximum loss would be the premium you paid to buy those long dated calls) — the best answer if concentration is your real enemy. But it isn't free, and you do let the shares go (which will trigger capital gain tax in many countries).

Index cross-hedge. Hedge a tech index instead of GOOG directly. Analogy: insure the whole neighborhood instead of your house. Cheaper, but if your house burns while the neighborhood is fine — a Google-specific event — it doesn't help.

Side by side

What I actually did: buy a 6-month put, financed by selling a 3-month call

Here's the exact structure, and — more importantly — why the two legs have different expiries, because that mismatch is the whole trick.

The long leg: a 6-month put. With GOOG near $355, I buy a put around the $345 strike, dated six months out. That's my floor. No matter what happens, I can't lose more than the slide from $355 down to $345 on those shares — roughly a 5% self-insured "deductible," and then nothing below it. I chose six months (not one month, not two years) for two reasons: a longer-dated put decays slowly, so my insurance doesn't melt away day by day, and it means I'm not forced to keep re-buying protection — often right after a scare, when puts are most expensive.

The short leg: a 3-month call, rolled. To pay for that put, I sell a call around the $390 strike, dated only three months out — and when it expires, I sell another one. Over the six-month life of my put, I sell the three-month call twice.

Why sell the shorter call instead of one matching six-month call? Two reasons, and this is the part most people get backwards:

• Shorter options bleed premium faster — and I'm the one collecting. Option time-decay (theta) accelerates as expiry approaches. A three-month call sold twice collects more total premium than a single six-month call sold once. As the seller, I want that fast decay working for me. This is the engine that gets the structure to "almost free."
• Rolling every quarter lets me raise the ceiling. If GOOG has climbed by the time my call expires, I re-strike the next one higher. So I'm not locking in a permanent low cap on a stock I'm bullish on for the long haul — I get to renegotiate my upside every three months.

The rough numbers

These are illustrative (at roughly 30% implied volatility, GOOG ~$355, hedging 1,500 shares / 15 contracts) — real strikes get priced off the live chain, but this is the shape:

Collect roughly $35,000 from two call sales against $36,000 for the put, and net premium I paid is ~$1000. That's the best case. In practice, where GOOG sits and how jumpy volatility is at each roll decides the real figure — which is exactly why the honest title says "(almost) free," not "free."

Analogy: it's like paying your annual home-insurance bill by renting out a spare room on a rolling three-month lease. Most years the rent covers the premium with a little left over. Some years the rental market's soft and you're a bit short. You're never quite guaranteed it's free — but it's a long way from writing a fat check for insurance every year.

Why "almost," and the fine print I won't skip

• You're capping your upside. In any quarter where I've sold the call, a monster rally above $395 leaves money on the table. I made my peace: I'd rather protect a six-figure gain than squeeze the last drop from it. Rolling the call up each quarter softens this, but it's the core trade.
• Roll risk on the short leg. Because the call is shorter-dated than the put, there's a moment every three months where I have to sell the next one into whatever the market looks like then. If volatility has collapsed, the new call brings in less, and the structure tilts from "free" toward "small cost." That's the price of the flexibility.
• Assignment. If GOOG blows through $395, I may be assigned and have to deliver shares (or roll the call up and out). Manageable, but it's homework, not set-and-forget — and the shorter call means it comes up more often.
• Volatility timing helps. Insurance is cheaper to buy when things are calm and richer to sell when they're jumpy. I try to buy the put when GOOG's implied vol is low and sell the calls when it's elevated. You won't nail this — just don't do the opposite.
• A collar hedges price, not concentration. This is the big one. My collar caps my losses, but I still own a giant slug of one company. If concentration is your real fear — as part of mine was — a collar is a comfort blanket, not a cure. It protects me while I do the slower work of actually diversifying underneath it.

If you're a US taxpayer, read this twice. Collars on hugely appreciated stock run into rules I don't face in Singapore. Make the collar too tight — protecting almost all the downside while surrendering almost all the upside — and the IRS can treat it as a constructive sale (§1259) and tax you as if you'd sold. Holding puts against your shares can also suspend your holding period under the straddle rules, and deep or short-dated covered calls can blow up your long-term treatment. Have a CPA or tax attorney structure it. I wouldn't pretend to know how to navigate this effectively.

The takeaways

1. Name your fear first. "I think it'll drop" and "too much of me is in one stock" are different problems. Hedge the price for the first; reduce / trim the position for the second.
2. "Free" means no cash, not no cost. A collar is paid for with your upside. That can be a great trade — just know what you're handing over.
3. Finance your insurance. The most useful idea in options for a long-term holder: use premium from something you're willing to sell (upside) to pay for something you want to buy (protection).
4. Mismatch the expiries on purpose. A longer put for a stable floor; a shorter, rolling call to harvest faster time-decay and keep your ceiling flexible. That's what turns "a collar" into "an almost-free collar."
5. A hedge is a position, not a one-time decision. Rolling, assignment, vol timing — it's ongoing. If you don't want the homework, plain trimming is a perfectly respectable hedge too.

I still own my Google. Nine years earned that stake, and I'm not in a hurry to walk away from it. But leaving the company forced me to stop treating it as a badge and start treating it as capital I'm responsible for.

If you're in a similar position, this shift in mindset is the real lesson here. The company gave you the shares; protecting them is your job now, not theirs.

I sleep a lot better knowing that if the whole thing goes sideways, my floor is in place — and building it barely cost me a dollar.

Not financial advice. I'm an individual investor sharing my own approach. Options carry real risk, including assignment and losses, and tax treatment varies by country and situation; consult licensed professionals before trading.