As we look for a wave of economic data to come out today, the early expectation is positive. Although, it is unlikely it will be that cut and dry.
Tech has been moving back up toward is high set back at the end of April and is showing some signs of strength. Take a look at the chart:
The NASDAQ set up a range earlier this year and while it has been moving more wildly than the other indexes, the range has held.
This sets up a trade that has a strong possibilty of winning, but we also see other factors helping the trade.
The VIX has settled down and is creating some bargains for options traders. While there are great options trades out there everyday, finding patterns with this clarity doesn’t happen every day. Strong trend upward in the middle of a trend, lower volatility to keep the premium price down.
If you are looking for the right option strategy to get the biggest leverage from this current market, the pro to go to is Don Fishback.
I would grab his book “Your Quick-Start Guide to Options Success” as well. It explains ideal option strategies–from spreads, to strangles, to straddles–in the most simple language I have seen. Download and don’t miss this opportunity.
To see one way to trade the current tech trend, scroll down.
Keep learning and trade wisely,
Market Wealth Daily
With the NASDAQ showing potential upward momentum and a pretty clear range established, it shows that it has the potential to get back up to the top of that range.
One way to take advantage of this is to use the ETF QQQ and buy a call between the current price of QQQ and the top of the range.
in the previous chart we showed the range on the NASDAQ. Here is a chart of QQQ and the top of the range is about 340 or a little above. The premium on a call option for July with a 336 strike is about $7.65 currently. If you took that contract at $765 (for the right to buy 100 shares of QQQ) you would be able to potentially make a profit if the stock moves past 336 to the target of 340.
There is a risk that QQQ may reverse and go down. The good news is that with a call option, your worst case scenario is that you would lose the $765. If you were to buy 100 shares of the actual ETF at $332 it would cost $33200. If you are trying to get a bigger potential return with the least amount of risk. the call option is definitely something to consider.
It is important to remember that you could lose the entire $765 so only trade with capital you can afford to lose.
If you need more information, check out this article on call and put options. https://www.tradewinsdaily.com/wendykirkland/call-and-put-options-explained-101/