Trading Observations

A chart of the QQQ ETF is shown below with the current breakout from the recent downtrend.

The QQQ's being up close to 5% in the last 2 weeks  has relatively low IV  and has made a nice move.

A trader who may be slightly bearish here or think the ETF may base for a while could look at a put calender spread.

A example might be a March/April 107  or 106 put spread. Selling the front month option and looking for it to decay faster than back month a 25-50% profit would be the target here.

The max loss would be the debit paid for the spread.

Posted to Stock & Option Scout on Feb 21, 2015 — 4:02 PM

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