Yo Pit Crazies,
The Invesco QQQ Trust (Ticker: QQQ) closed at another year high yesterday. Not all-time highs, but a year high is still significant into the QQQ rebalance.
It seems like every trader who presold is having second thoughts. India looks good for Apple Inc (Ticker: AAPL), and that’s only a small market of 1.2 billion people.
Even in the face of a mechanical contraction upcoming, good news can happen. AAPL is a case in point.
The bigger issue is that implied vol has hit a floor in QQQ, and it’s not dropping any further. I’m holding a QQQ strangle I posted in the Trading Desk and looking for a squeeze and drop, but right now I’m only seeing squeeze up since Friday. I’ll need a bit more action today or I’ll have to shut it down on theta cost. At least the calls are close to green.
QQQ 3 month chart with 20 day realized vol on the bottom
Once again, realized volatility is creeping down as QQQ winds its way up. Option prices are at one month lows.
Another nice recipe for a good trade.
Pre-Earnings Runs Are Nuts
Right now traders pre-sold QQQ stocks only to have them ramp up. They could very well keep going out this rate until the rebalance happens Friday into Monday.
I will likely roll to the QQQ JUL28 strangle going into rebalance and earnings.
The Rundown
Option Shopper
Licia is running a hot streak of her own with 3 closes in 2 days!
Carnival Corp (Ticker: CCL) Jul21 18 puts closed for a 73% gain
Pfizer Inc (Ticker: PFE ) Jul28 35.5 calls closed for a 9% gain
Trading Desk
SPDR S&P 500 (Ticker: SPY), Proshares Ultra Short Term VIX futures ETF (Ticker: UVXY) Jul14/Jul21 436/444 strangle, 18.5 puts closed for a 96% gain
To Your Trading Success,
AG