Trade Update: Spreading Sept $QQQ Puts

by CC August 20, 2015 3:39 pm • Commentary

On July 24th we expressed a bearish view in the Nasdaq 100 (via the QQQ: A Few Good Ten) with the thought that any loss of leadership in the space spelled technical doom for the index. Here was the trade:

Trade – QQQ ($111.70) Buy Sept 110 Put for $2

Here was my rationale on CNBC’s Options Action:

Our plan was to spread on any move lower towards support. Today we’re seeing that loss of leadership and the QQQ now near its 200 day moving average. We’ll take the opportunity to spread our original puts and be there with defined risk for any further breakdown:

Update: Sold to open the QQQ ($107.65) Sept 102 puts at .85
New position: Long the QQQ Sept 110/102 put spread for 1.15

Breakeven on Sept expiration, profits of up to 6.85 below 109 with max gain at 102 or below

Losses of up to 1.15 above 108.85 with max loss of 1.15 above 110.