Short term
Trade view / 26 June 2016 at 22:51 GMT

UPDATE: Time for another adjustment to Nasdaq 100 calendar spread

Product Manager, Options Trader, Educator
Instrument: QQQQ:xnas
Price target:
Market price:

Our first roll (23 June 16 111 Call) of the original calendar calendar spread expired deep OTM, following the massive slide of global markets.

Please see How to trade Nasdaq 100 index in low volatility and UPDATE: Adjustment to the Nasdaq 100 calendar spread.

Management and risk description

On Friday, the ETF tracking the index closed at $104.49, which was well below our long strike price of $111. Remember that for the trade to be profitable we need the index to trade close to our strike price of $111.

Following the mayhem on Friday, the selling pressure may continue into the week of June 27. As a result, we will  make a slight adjustment in this strategy to give it slightly bearish market posture.  We are going to sell a lower strike price to bring more income against the July 16 111 strike price.


Sell 1 July 16 108  call for $0.18

By selling the weekly 108 call for $108, we will further reduce our cost basis from $0.62 to $0.44 (that is, $0.62-$0.18). We will provide another update before that expiration.

— Edited by Robert Ryan

Non-independent investment research disclaimer applies. Read more


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