Chart is courtesy of www.finviz.com
When I saw the price close above the 50 Day Simple Moving average and the Day SMA curvng back up I fugured that I’d buy some QQQ call Options.
Bought 10 QQQ CALL Option contracts at a $220 Strike Price and also 10 QQQ Option contracts at a $230 Strike Price. I wanted to see if one could make more money buying an Option which was further out of the Money (the $230 Strike price). Both option sets have an Expiry of 05/15/2020 and were bought at Open on April 15 2020.
QQQ2015E2202020/05/15 on POWERSHARES QQQ TRUST CALL at $220.00 10 contracts
Bought at $4.07 ea
Price at Close on 04-16 2020 $5.26
Total Value at Close on 04-16 2020$5,260.00
Change +$1,280.00(32.16 %)
Total Gain on the $220 Call so far $1,190.00(29.24 %)
QQQ2015E2302020/05/15 on POWERSHARES QQQ TRUST CALL at 230.00 10 Contracts
Bought at $1.47 ea
Price at Close of 04-16 2020 $1.88
Total Value at Close on 04-16 2020 $1,880.00
Change +$580.00(44.62 %)
Total Change on the $230 Call so far +$410.00(27.89 %)
Total Gain from both sets of Calls +$1,600.00(28.88 % Gain)
So the $230 Call was lower in cost. The closer to being In The Money the higher the cost of the Option. Percentage wise the gain on the $ 230 Call was greater. Because the $220 costs more (it is closer to being In The Money) the Dollar amount gained is greater.
All funds in US Dollars.
The Calls were purchased with an Expiry on May 15 2020, to give things more time to rise.
This post is not meant as investment advice. Please seek out the help and advice of your own Investment Advisor. You can lose money, even all of it, when placing bets at the Stock & Options Market Casinos. Posted for my own education. I’m trying to learn ways to trade the QQQ Options.
Posted by Vincent Banial
The stock chart of the QQQ is courtesy of finviz.com.
Note that the price move up above the 200 Day Moving Average. Note also, that the 20 day MA seems to have bottomed and looks to be starting to curl back up. When the price sits between the 200 Day MA and the 50 Day MA it could break up above the 50 Day MA. I suspect that the price will now sit between the 50 Day MA and the 200 Day MA
The rise IMHO is not the result of non professional stock traders. It takes deep pockets to move the market so rapidly. Note also that a ” W” shape has formed which IMHO is a bullish sign. All this points to a market bottom having been established??? If so I’m surprised and shocked at this turn around.
One idea that has crossed my mind is that if the stock markets stay down then the sitting US president will likely not get re-elected. That would mean the potential for future taxes on the wealthy instead of further Tax Breaks. If the US Stock Market goes back near or above the prior Highs, then the sitting president will very likely get re-elected. Those who can protect themselves, will. It is just strange to see this, as this is vastly different stock market behaviour say compared to 2007 and 2008. Back then the rally back up started around 2009.
I got interested in the QQQ ETF because there are Options available. With one low cost option, I can control 100 shares of the QQQ. I caught the drop around Apr 01 via a QQQ PUT Option trade.
|DATE||TRADE TYPE||SYMBOL||QUANTITY||TARGET PRICE||PRICE||COMMISSION||TOTAL CASH VALUE|
|4/2/2020 9:57 AM||Option: Sell to Close at Market Open||QQQ2003P190 (QQQ 190 – Fri 2020)||10||$7.92||$19.50||$7,900.50|
|4/1/2020 10:00 AM||Option: Buy to Open at Market||QQQ2003P190 (QQQ 190 – Fri 2020)||10||$6.46||$19.50||$6,479.50|
I have not played the rally but I hope that this rally back up continues…
This post is for my educational purposes. Please seek out the advice of your own professional Investment Advisor before placing any bets at the Stock Market Casinos. You can lose money playing the Stock Market, even all of it.