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BookingAlpha Option Trading Advisory

Thursday, December 22, 2011

January QQQ Bull Put Spread closed

Demo Trading:

The "Bull Put Spread on the QQQs" initially described here had been opened for a 0.29 credit and was closed minutes ago for a 0.18 debit, yielding a quick 0.11 profit in 10 days in views that the Nasdaq has looked weaker than normal and with little upside movement during the recent rally in all major indexes, which are getting closer to important resistance areas. This particular position is the one that could screw the month, a.k.a the closest to be in danger.

The closing trade was as follows:

Buy to Close 12 QQQ Jan 52 Put @0.35 (Initially Sold @0.75)
Sell to Close 12 QQQ Jan 50 Put @0.17 (Initially Bought @0.46)
Net Debit 0.18

A 0.11 profit (0.29 Credit to open and 0.18 Debit to close) in 12 spreads means $132. That is 0.11 * 100 * 12 = $132.

After this, two trades remain open: The January IWM Bull Put Spread (63/65). And the The January QQQ Bear Call Spread (61/63). They both look pretty safe so, the current plan is to let them expire worthless if possible by January 21, getting all the juice and saving capital in commissions.

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  1. Congratulations for this successful trade.

  2. Could we know wich is the set up you use to lounch a vertical Spread, please?

    thanks and congratuletions for you blog.

  3. Set up? Well, I don't really have strict rules in terms of numbers. I try to sell calls when the market is overbought and sell puts when the markets look oversold. If this extreme conditions are not present I consider the market to be in no man's land and do nothing. You can go through past trade simulations and have a look. And Thanks for reading!