On Friday, April 22nd, Alphabet—the parent company to Google, and the (now debatably) biggest company in the world, fell by over 5 percent. The question that many investors have is: why did this big of a drop occur? And, of course, there is the corollary to this question: should a drop of this magnitude have occurred?

First, Alphabet missed on analyst expectation with its earnings Thursday after the market closed, so a drop was more than expected. This is a normal course of action, especially when it comes to a big, well known, and highly traded company like Alphabet. The only company that might be traded more heavily on the front is Apple, and most brokers out there carry both of these companies because of their universal appeal. So, when it was announced that earnings had missed by $0.47, we were right to expect the price of the company’s stock to drop. Traders that were ready for this were able to make a lot of quick profits, especially if their broker offered early day trading on U.S. stocks.

But for a company that is priced at such a huge amount, a drop from up near $760 down to under $720 seems like it was largely unwarranted. And while it is also true that revenue has dropped, a 5-plus percentage drop in price is still excessive on the surface. To get a better idea of whether or not this is true, we took a look at the revenue from the last few earnings reports. Three releases ago, at the end of September 2015, revenue was at $18.675 billion, and the company was just over $600 at that time. Two releases ago for the end of December 2015, revenue was $21.329 billion, and the stock was priced at just over $725. Now, with revenue at $20.257 billion, we should expect the stock to stand at a lower price than it was back in January. The current price of $718 seems right in this respect then. Yes, this simple method doesn’t take into account the overall market drop that we saw after the Fed lowered interest rates, but it is a starting point.

The drop in price likely may have been just a kneejerk reaction to a slightly worse than expected earnings report, but in the end, it probably was the right move, albeit a sudden one. If you were trading with Alphabet/Google, if you had a put option strategy, you probably made out very well. A strategy like this when any major company has a poor earnings report is smart, but you shouldn’t expect a mammoth drop like this each and every time there’s a poor report. Typically, a really bad earnings release would warrant a 1 to 2 percent drop in price, not a 5 percent drop. When you use binaries, though, the magnitude of the drop doesn’t matter, but just the fact that a drop is occurring. It gives an extra element of predictability to your trades, which is really nice for those that like to be able to easily track their profitability ahead of time.

Finally, know that Google is likely to still be a strong company into the future. Unlike companies like Yahoo, Google has branched out, has the dominant market share, and has far better leadership. They will see ups and downs just like everyone does, but they have positioned themselves to continue to push forward. The first part of 2016 was rough on all businesses, and Google didn’t escape this. But they are very likely to keep growing, and although a short term put option strategy is still smart, a long term call option strategy is still smartest.