Home › Forums › Closed Trades › Hedging Tech With QQQ
- This topic has 6 replies, 2 voices, and was last updated 6 years, 8 months ago by Steven Place.
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July 29, 2016 at 10:05 am #6592Steven PlaceKeymaster
Setup: Hedge/Overbought/Resistance
Price: 1115
Description:
The Nasdaq 100 is headed hard into resistance, and all the “good news” with respect to major earnings events are already getting priced in. I’ve got some tech exposure and I think a smart short here in the index makes sense.
Since vol is so low, doing some put calendars is a good bet:
Full Time Profits Order Ticket Type Asset Duration Strike C/P STO QQQ 19 Aug 16 110 Put BTO QQQ 16 Sep 16 110 Put Total Debit: 0.69 This is a scaling trade, so if QQQ breaks out, I’ll add the 113 put calendar to it.
- This topic was modified 6 years, 10 months ago by Steven Place.
- This topic was modified 6 years, 10 months ago by Steven Place.
- This topic was modified 6 years, 9 months ago by Steven Place. Reason: switched debit for credit, thanks bob
Attachments:
You must be logged in to view attached files.July 29, 2016 at 11:46 am #6602Robert AspanParticipantTotal Credit should be Total Debit in the order ticket.
August 9, 2016 at 2:38 pm #6690Steven PlaceKeymasterAdding to this trade:
Full Time Profits Order Ticket Type Asset Duration Strike C/P STO QQQ 19 Aug 16 114 Put BTO QQQ 16 Sep 16 114 Put Total Debit: 0.87 NOW– August expiration is just a week and a half away. Odds are these Aug puts will expire worthlesa dn we’ll be left with a double long put. We’ll be looking to convert this into a condor if/when we get reversion.
August 9, 2016 at 2:54 pm #6691Steven PlaceKeymasterThis also moves opex breakeven up from 114.10 to 115.70.
September 2, 2016 at 12:06 pm #6894Steven PlaceKeymasterAugust options are out of the way, so that leaves us with September options only.
The 110 put has a basis of 0.69 and a current value of 0.08
The 114 put has a basis of 0.87 and a current value of 0.30
Because this was a hedge, I’m not too worried about it… if QQQ manages to lose 116, we can see an easy move to 114. I definitely want to keep these on as “disaster” protection.
Here’s the thing… volatility, both realized and implied, have been so low over the past month or two. If vol expands to the downside then this trade can get back to a profit really quickly.
September 12, 2016 at 9:33 am #6936Steven PlaceKeymasterTaking down the 114 puts here. Holding onto the 112s just in case things really fall apart.
IWO Premium Order Ticket Type Asset Duration Strike C/P STC QQQ 16 Sep 16 114 Put Total Credit: 1.3 - This reply was modified 6 years, 8 months ago by Steven Place. Reason: changed debit to credit
September 23, 2016 at 10:46 am #7014Steven PlaceKeymasterRest of the puts expired worthless.
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