74% probability trade on QQQ (Synthetic Call Ratio)
With equities still rallying I can redeploy another trade on the Q's. If it continues to go higher it will get to our max profit zone, if it starts to drop we don't have any risk and still make money. Worst case scenario is that we continue this nonstop rally without mercy then we would be basically short from 136.50 which would be at the all times high.
The trade: Synthetic Call Ratio spread on QQQ for $.50 credit per contract.
Bought one 134 Call for every two 135 Call for a 2:1 Ratio spread with no risk to the downside and our max win at 135. Then bought the 141 Call to reduce the capital requirement, essentially making this a synthetic Call ratio spread.
By buying the delta .05 call we reduce our capital requirements for the trade from around $3k to $450 per contract and reduce our credit received by only $5 per contract. Pretty good trade off in my mind.
Our break even is at $136.5 giving us a 74% chance we make money on this trade.
The trade: Synthetic Call Ratio spread on QQQ for $.50 credit per contract.
Bought one 134 Call for every two 135 Call for a 2:1 Ratio spread with no risk to the downside and our max win at 135. Then bought the 141 Call to reduce the capital requirement, essentially making this a synthetic Call ratio spread.
By buying the delta .05 call we reduce our capital requirements for the trade from around $3k to $450 per contract and reduce our credit received by only $5 per contract. Pretty good trade off in my mind.
Our break even is at $136.5 giving us a 74% chance we make money on this trade.
Trade active:
With the down move this last couple of days we are already in profit, a couple of more days like this and we will get to our target.
Trade active:
After being winning on this trade, the Nasdaq decided to rally and challenge our break even. With 11 days to go I decided to adjust the trade (partial management) and closed the Vertical debit spread part of the trade (134/135 Call spread) for almost full profit of $90 per contract and closed the other lone call for $6.
Then Roll the other Challenged Calls (@135) to Jun (39 DTE) for an additional $0.83 credit per contract. Then Sold the same amount of Qty of puts @ 135 (For $1.12 ea) and now we have a Directional Straddle.
Then Roll the other Challenged Calls (@135) to Jun (39 DTE) for an additional $0.83 credit per contract. Then Sold the same amount of Qty of puts @ 135 (For $1.12 ea) and now we have a Directional Straddle.
Trade active:
Rolled to the next cycle, but instead of going inverted I went with a normal Strangle on 135/140 for additional 2.59 credit.
Trade closed manually:
After giving us a hard time, the move down give us a chance to close for a nice profit. It took some time, but at the end of the day it was a winning trade.
