Hello Traders,
We played QQQ for a lower volatility event. Even with a gigantic move higher in the stock, our trade didn’t lose all that much value. It shows how the implied volatility was pumped up to a very elevated level. However, we are taking a loss on that position and rolling to a new trade. We bought the original put calendar spread for 10.65 and closed it today for 9.00 credit a loss of -1.65 per spread. We then purchased a new calendar put spread for a total cost of 9.55 debit. So, we have added 0.55 more risk (then simply holding our original trade). However, we get to move up 10.00 on the put strike price. The details are as follows:
Sell to close: QQQ Jan 15th (monthly) 275.00 strike puts
Limit credit: 9.00
Buy to open: QQQ Jan 15th (monthly) 285.00 strike puts
Sell to open: QQQ Nov 13th (weekly) 285.00 strike puts
Limit debit: 9.55
If this trade doesn’t start working through next week, then we will move on to a different strategy.
In addition, we bought 6 more shares of ABBV at 92.16 to hedge our current covered call. That moves us up to 122 shares overall.
Have a nice weekend!