January QQQ Bear Call Spread

Demo-trading:
SELL 12 QQQ January 61 Call (@0.44)
BUY 12 QQQ January 63 Call (@0.14)

Credit: $0.30 (0.30 * 100 * 12 = $360)
Margin: $1.70 (1.70 * 100 * 12 = $2040)
Break-even point(s): 61.30 (Currently at 57.10, markets would have to rally more than 7.3% more)
Probability of success: 77.97%
Days to expiration: 46
Max return on margin: 17.65%
Commissions: $36.00 (Assuming Interactive Brokers' schema for Canadians)

(Click on Image to enlarge)

The highest high for the QQQ this year was 59.83 reached on July 26. In order for this trade to be a loser QQQ would have to go up to 61.30. Markets are getting into overbought territory. As soon as there is a pull back I will demo-trade the close of this trade, probably won't hold it till expiration.

Check out demo-record

Related articles:
Weekend Thoughts(December 17, 2011)
Weekend Thoughts (December 23, 2011)
Weekend Thoughts (January 1, 2012)
Weekend Thoughts (January 7, 2012)
Weekend Thoughts (January 15, 2012)
Weekend Thoughts (January 21, 2012)

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