But on to it: Your Christmas QQQ Christmas spread.
Here it is in a nutshell: I believe the #QQQ will wander up a bit then drop harder than the wander up. So with that in mind, my spread that I suggest will be a 3:1 money ratio: We are going to bet 1,000 with feb calls at the money and 3,000 on March puts just slightly out of the money in order to jump our profits. There will most likley be a lull after the first of the year right after a slight pull up then a drop. Seeing that our expiration dates are out there a bit, we will have time to be able to untilize this without any significant options erosion.
Where will the QQQ go from there into the year? Read my previous post here. Again according to my previous analysis I am seeing storm clouds on the horizon due to the fact that the MACD indicator's sine wave pattern is beginning to flatten out. As the #stockmarket drops, all stocks will follow accordingly.
So lets take a look at the QQQ weekly:
What is of interest here is a previous pattern that I believe will repeat to a fractional part: look back at the previous "graveyard" cross and you can see that there was further pull up past that. I believe the patttern will repeat somewhat yet tampted down by the post holiday doldrums and bills. The market will then drop a bit before resuming. We are going to profit both ways with our options.
QQQ Feb 2015 105.000 call (QQQ150220C00105000)
-OPR Watchlist
2.31 0.14(5.58%) 12:42PM EST
Prev Close: | 2.51 |
---|---|
Open: | 2.65 |
Bid: | 2.34 |
Ask: | 2.35 |
Strike: | 105.00 |
Expire Date: | 20-Feb-15 |
Day's Range: | 2.29 - 2.69 |
---|---|
Contract Range: | N/A - N/A |
Volume: | 3,266 |
Open Interest: | 15,800 |
So that is our QQQ Feb Option call, which will be the 1/3 option. So if you have 4 g, this is the 1g. Now for the other 3g, that will go to the put side (we are doing this on a 3:1 ratio) and here is our put:
QQQ Mar 2015 103.000 put (QQQ150320P00103000)
-OPR Watchlist
2.84 0.13(4.68%) 1:14PM EST
Prev Close: | 2.78 |
---|---|
Open: | 2.65 |
Bid: | 2.78 |
Ask: | 2.79 |
Strike: | 103.00 |
Expire Date: | 20-Mar-15 |
Day's Range: | 2.65 - 2.93 |
---|---|
Contract Range: | N/A - N/A |
Volume: | 1,572 |
Open Interest: | 2,399 |
This put has a bit more time on it, it expires in March.
As for our PETX short, hold it, its coming back down. Now as promised, here is my screenshot for the beta version of the 1045report.com:
I am incorporating elements that will provide value: I have recieved feedback that people are very interested in the QQQ and a future spotlight on the market particularly in the upcoming three days, and I will also have a few more revisions before this comes to the frontpage. I am also starting two funds. One fund will be the futures fund and the other fund will be a QQQ covered call fund.
Happy Holidays, I wish you and your family the best,
Mark
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