Thursday, December 30, 2010

New Trade in QQQQ

With Volatility so low and the attitude of complaceny in the market I think that the risk is to the downside. So I am willing to take a low risk high reward play.

I bought 10 Jan '11 $54 puts @ $0.66. There is 22 days until expiration, but I only plan to hold these til next week at the latest.


  1. I like that trade. Everyone seems to be bullish which means the market will probably go the opposite way. A slight pullback would not be surprising.

  2. On Friday I took have of this trade off for a small profit, just enough to cover commissions and then a little more. I then sold 5 53 puts for $0.46, making this a $1 wide put spread with a max loss of $100 and max gain of $400 at expiration.

  3. So today I decided to take the put spread off for a small $20 loss overall. My signal that I look for with respect for trend has just turned bullish again. As I have discussed in previous posts I watch the 5 and 10 day moving average, when the 5 day is above the 10 day then the trend is up and when it is below the trend is down. Although I think this thing is overbought I know that the herd can make this thing go further then I think it can go.