New Trade QQQ: Queuing Up for a Market Breather

by CC March 15, 2012 2:47 pm • Commentary


  • Top 5 stocks make up about 43% of the index – AAPL 18.4%, MSFT 9.25%, GOOG 5.3%, ORCL 5%, and INTC 4.7%

My Take: I guess the obvious thing here is that if you think the market rally, specifically in tech has gotten increasingly narrow, all you have to do is add up the % of the above 5 top weighted stocks in the QQQ and you see that these few names at more than 40% of the index will clearly dictate the price action as we are at multi-year highs in most major indices.

Obviously I am fairly bearish, and think that Short QQQ is a great way to play for a pullback in AAPL specifically.

TRADE QQQ ($66.64) Bought March 30th Quarterly 66/64 Put Spread for .44

Bought 1 March 30th 66 Puts for .65

-Sold 1 March30th 64 Puts at .21

Break-Even On March30th quarterly expiration:

Profits btwn 65.56 and 64 make up to 1.56, max gain of 1.56 64 or below.

Losses of up to .44 btwn 65.56 and 66 and max loss of .44 above 66.