Yo Pit Crazies,

After a year-altering rally over the last week, Apple Inc. (Ticker: AAPL) is still holding up the market, just a bit more than $10 off its highs.

I thought yesterday that the Powershares QQQ Trust (Ticker: QQQ) had underpriced options for the next week. 

Read on to see if I was right  …

Also, yesterday I promised a Trading Legion idea, and I will not disappoint. If you want to see what true options mentoring looks like it’s below, as well.

Implied Volatility Was Flat Wednesday

Stocks were down around 1% on Wednesday, but implied volatility was flat.

I was able to enter my upside call calendars for around 26% IV in QQQ on Wednesday.

Note below the one-week move is expected to be around $12.40, with the daily move around 5.83. 

As I write this, the QQQs were moving right at that $6.00+ mark for the day. However, the 10-day realized is closer to 35% IV, or 10 pts higher than implied. In this case I am choosing to ride the realized vol for a few days.

If that sounds like a lot, I break it down in this video.

My trade in QQQ is trying to ride the range and my bet is that I am paying less for the range than it will actually move. Small price for a bigger move.

To Your Trading Success,

AG