Samwise Quick Reference Handbook
To streamline our daily blogs and conserve space, we’ve organized key resources into a convenient, collapsible dropdown menu below. A sort of Quick Reference Handbook if you will -- as our friends in aviation might call it. By clicking the menu below, you’ll have qu...
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Hey Sam, last week you said you wanted to invest the 2nd part of the short trade when and if the 1st one was clearly not going to to work out, and the 3rd if the market would go higher still after the 2nd portion. That made a lot of sense to me.
Has your view on that changed due to the market action today?
Fading, might not get the entry today
Hi Sam,
Based on your briefings discussing the QQQ put spread trade, I get the sense you want to make sure we’re not paying for extra time and want to get the ideal expiration.
Since we don’t truly know what will happen, is there any merit in extending the expiration out a little bit longer, maybe October 31st or even November 21st, to hedge against any super outlier “this time is different” situation. This sacrifices potential profit, but increases the chances of profitability of the trade.
For example, the QQQ 545-535 put spread for November 21st trades at ~$1.90. If the QQQ starts the correction today and ends up having an 8% correction then we’d bottom at around $527, putting the spread around 125-160%-ish returns. This is a very good return, no? Even if this is an outlier and we run all the way up to $600 and the rally extends to 120 days and only has an 8% correction we’d bottom around $552, which puts the spread around 60% return (roughly). This is still pretty good all things considered.
Is there any merit in this type of thinking? You’d still only allocate 10%, but you wouldn’t purchase as many contracts since the premium is higher. This is ok because we’re more concerned about the return % rather than # contracts.
Thanks!
Hi Sam, what are some of the factors you’re looking for when it comes to potentially pulling the trigger on that 1% trade? I’m assuming rally duration is one (i.e. longer we keep going on this rally in number of days the more confident we are that a top is imminent)?
Hello Sam,
Thanks for update.
The more I read you, the more I have the impression that the probability of seeing a QQQ correction greater than 12% – 14% increases compared to a correction of 8%, particularly with your trading strategy.
Any changes for NVIDIA ?
Best
Karl
Hi Sam,
I remember the COVID correction happening and thinking to myself: “wow, this was caused by this random one-in-a-lifetime global event”. Since I’ve started reading your briefings I’ve slowly come to internalize that events and corrections don’t have such a direct link as I once did. However; the COVID virus really did seem like something bespoke. What are your thoughts on the timing of it all? Seems so coincidental in my mind that a global virus would spread across the world at the exact time when a correction was due. Like, if today was Feb 2020, I would NOT have “global virus spreading across the world, shutting everything down” on my bingo card of ways the rally ends haha.
Thanks!
I was thinking something similar recently how the COVID crash and I think the brief Deepseek crash (although that was more of a blow to NVDA than QQQ) both happened after the market had rallied for a bit, so I wonder if maybe that’s what led them to having more of an impact. Like maybe neither would have been so bad for the market if they happened while the market was bottoming out and oversold
Gap Up!
ATH! Rally at day 88 pushing for $577
Gap fill, couldn’t get any momentum at ATH