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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The QQQ swinging up and down today sure feels like it’s about to blow up at any moment.
Hey Sam,
does it still make sense to hold on to the June 2027 400 QQQ call? It seems to have capped out at 100% with barely any growth anymore.
I mean we’ve sort of outlined our plan which is to continue to hold them and hedge them. Their growth is based on how far the NASDAQ-100 rallies. The QQQ is stalled and so all leaps are stalled.
You hold long positions to hedge out opportunity risk. What happens if the QQQ rallies to $600-$650 a share? Those calls go up another $50-$75 from here.
The June 2027 $400 calls are trading at around 182 right now (mid-price). That’s $582 projected on the option. If the QQQ runs to $650, that adds a minimum of $75 in upside. That’s 41% in upside from here. June 2027 is two years out into the future. The QQQ can very easily eclipse $650 way before that time.
So the June 2027 $400’s hedge out that upside opportunity risk. That’s why we’re long and stay long.
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We then hedge out that risk. An absolute requirement. No hedge and the portfolio will inevitable collapse to $0.00. Hedging is a requirement.
We hedge out the downside risk by doing things liek selling covered calls and buying puts.
We bought hte March 2026 $400’s to protect the deeper downside. We’ve sold the September $540 calls to protect the immediate downside. And now we will buy the June $500’s to fully protect the portfolio.
Risk is two-sided. It’s never a simple do we sell x-position. Anytime we do any action, there’s a double-sided risk to consider (1) what happens if the market runs to $650; or (2) what happens if we crash.
The June 2027 $400 calls we own is just one piece of that overall puzzle.
Sam, I assume you will do likewise with the nvda calls?
Not necessarily. It depends on a variety of factors. For now, we’re just focused on our core position and ensuring we’re not taken out by a parabolic run or crash. But we might consider movement in Nvidia.
The risk of a parabolic rally is still very low. It’s just that we’re approaching the conditions where if it does happens, it’s going to happen here. So we just need to be careful about that.