January QQQ $500 calls at $15 on watch; hedge to come later
I wanted to give a heads up in a separate post that we may be putting on this trade at any moment. Here's how the trade will unfold and how we plan to hedge it out. We're considering putting on a $4k long trade in the January $500 calls ...
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I pulled he trigger at $15.10. I missed NVDA leaps in the past trying to get the perfect price and realized I would rather be in the game and not miss the train.
Hopefully jumping the gun isn’t too big a deal
Filled at 15.11, a bit early.
Are you going to post a trade for the put or should we have executed the put as well?
EDIT: Ok I get it, you are waiting for the put to come down in price to 4-5$.
Yeah so strategically here’s what we’re sort of doing. Because the QQQ is so oversold, there’s a high probability that it rebounds back up to $500. When that happens, we’ll look to buy Next Friday’s $500 puts at $4 or there abouts. We’ll buy 1 contract if that happens while we’re in a single contract for the $500’s. if we end up with 2 contracts in the $500’s, then we’ll have a $3,000 position and we’ll end up buying 2 contracts to hedge it by purchasing around $800 worth of the $500 puts expiring Nov 22.
By waiting on the rebound, we end up with better hedge prices and a better overall risk-reward set-up.
Right now, the January $500’s should move up to around $22.00 per contract on a rebound back up to $510. That’s a 50% return or about $1500 gain on a 2-contract position. That should be off-set by the $600-$800 loss we’d take on the hedge. We’d sell 1 contract and lock in gains and then hold the remaining position up to $520+ which could end up returning 100% overall.
So that’s the general strategy. To put on our next trade, we’d need to see the QQQ stay down here for several more trading hours leading to a longer oversold scenario. Maybe even after some push and pull. The longer we remain oversold, the more likely it is for the QQQ to explode higher.
Filled 2 at 14.72. So it begins
2?
Same posted an update we will be buying 1 more today and 1 more on Monday
Yeah I think that is the plan but there is no trade alert yet for a 2nd buy.
Ya, I might have jumped the gun a bit on the second one
Yeah, good for you for getting it at 14.72 though! I got mine at 15.21 which i’m still happy with.