What’s The Trade?
On 9/28, I closed the QQQ bearish Call Spread for a $35 debit, making it a winner for a $65 profit. I did this buy Buying to Close the 10/15 379 call and Selling to Close the 10/15 384 call. This was over 50% of the premium targeted!
SELL TO OPEN A BEARISH CALL CREDIT SPREAD IN QQQ FOR $109 – If you are bearish QQQ, consider a Bear Credit Spread, which I filled on 9/20 for a $100 credit. I sold the 10/15 QQQ 379 call and bought the 384 call, risking 4 to make 1. There is an 86% chance of keeping half of the premium. With QQQ trading at 365 on 9/20,
- Sell the October 15th 379 Call for $206
- Buy the October 15th 384 Call for $97
- Premium: Try to collect at least $109
- Rationale: This is a defined risk trade. You can make up to $109 if QQQ stays where it is or stays below $379 on expiration. QQQ has a juicy IV Rank of 37%. Adds -8.01 SPY negative beta weighted delta to portfolio for those that have too much long exposure. Collects $3.39 in theta each day. The stock can still move up 14 dollars and be profitable.
- Probability of making 54$: 86%
- Assumption: Bearish
- Timeframe: ~1-3 weeks