Time Has Come!
Time Has Come!
QQQQ
My OPX target for QQQQ has not changed and I’m still looking at 31.5 area for OPX.
I would normally go with my favorite butterfly, but 32 strike price now only has a very small time premium ($0.14) and there is no point of selling these strikes, so I would just go with simple debit/credit spreads.
Here is QQQQ 35/33 bear credit spread. You buy 35 May QQQQ call and sell 33 May QQQQ call.The reason that I’m making it as a credit instead of a debit spread is because of the open interests – there are more open interests in the call than the put side, so the order fill would be better.
This position covers anywhere from 34.26 (the current QQQQ quote) to the downside, and even if the underlying does not move at all and expire right at 34.26, you won’t lose a penny.
Probability: 50%
Cost: $0.83
Risk/Reward: 138%
Stop: $35.39
QQQQ 35/33
Here is a lottery ticket: QQQQ 33/32 bear credit spread. You buy 33 May QQQQ call and sell 32 May QQQQ call.
Probability: 23%
Cost: $0.16
Risk/Reward: 525%
Stop: Please be prepared to lose the entire premium on this trade.
QQQQ Lottery
SPY
We don’t have a confirmation on SPY as of yet, but I’m sure that this will follow QQQQ. If you need a confirmation, please wait until tomorrow to put the trade on. It’s better to do it right than do it prematurely. Your profit may be less but you have higher probability of success.
I’m looking into 82~85 area for OPX on this down move.
Here is SPY 90/93 call credit spread. You buy SPY 93 May call and sell 90 May call to make it 90/93 credit spread. This position covers anywhere from 91.6 (the current SPY quote) to the downside, and even if the stock price does not move at all and expire right at 91.6, you won’t lose a penny.
Probability: 52%
Cost: $1.45
Risk/Reward: 106%
Stop: $93.25
SPY 90/92
Here is SPY lottery ticket: SPY May 87/89 put debit spread. Again, I would normally put on butterfly, but there is not much premium left on 86~87 strike price, so we would be better off without additional legs.
Probability: 28%
Cost: $0.41
Risk/Reward: 258%
Stop: Please be prepared to lose the entire premium on this trade.
I mentioned this yesterday, but now there are more stocks to short – please look at retail and high tech sectors. Many of them have already rolled over yesterday or today and ready to short. If you need my help on putting spreads together, let me know. I have shorted many of them yesterday and still adding on.
Fujisan
UPDATE 2:50pm EDT: Mole here – I think we’re painting a falling wedge on the ES futures, which is a reversal pattern:
Careful – if you are sitting on profit you might want to reel them in now.
UPDATE 3:59pm EDT: Last minute pump attempt failed – I’m liking it! 🙂
