QQQ - (Short Premium) Short straddle to profit from high IV $$$
In this video I cover a short straddle trade in QQQ that has a slight bullish bias to profit from both a price pop as well as the high implied volatility in this underlying.
**Current Market Structure**
-Medium/Long term bullish trend
-Price is reaching some key support areas at 175, 171, 170
-Bearish weekly candle may see prices push lower but I expect buying pressure to quickly enter back into the market
**Trading Tips**
-Right now is a good opportunity to be selling premium as the implied volatility has spiked from the recent selloff
-IVR is much higher in QQQ than in SPY or DIA due to the tech heavy nature of the Nasdaq and the fact that much of the selling has been in tech
-I could see price dropping down to key supports but I expect strong buying to enter back in, so I selling premium with a bullish bias
-Breakevens are in good areas with the lower BE just below key support and the upper breakeven giving plenty of overhead room in case price starts running up quickly
**Trade Ideas**
-I sold 178 strike straddles w/ 53 DTE for $9.50 per contract($950 total profit)
-I am selling premium with a bullish bias to not only profit from the high IV but also to profit from a bullish directional move.
-My defensive strategy, in case either my put or call is breached, will be to roll the untested side and create an inverted strangle. If the price is tested on the put side I would likely sell new 16-30 delta naked puts to further profit from high IV and get more directional for a price pop.
**Current Market Structure**
-Medium/Long term bullish trend
-Price is reaching some key support areas at 175, 171, 170
-Bearish weekly candle may see prices push lower but I expect buying pressure to quickly enter back into the market
**Trading Tips**
-Right now is a good opportunity to be selling premium as the implied volatility has spiked from the recent selloff
-IVR is much higher in QQQ than in SPY or DIA due to the tech heavy nature of the Nasdaq and the fact that much of the selling has been in tech
-I could see price dropping down to key supports but I expect strong buying to enter back in, so I selling premium with a bullish bias
-Breakevens are in good areas with the lower BE just below key support and the upper breakeven giving plenty of overhead room in case price starts running up quickly
**Trade Ideas**
-I sold 178 strike straddles w/ 53 DTE for $9.50 per contract($950 total profit)
-I am selling premium with a bullish bias to not only profit from the high IV but also to profit from a bullish directional move.
-My defensive strategy, in case either my put or call is breached, will be to roll the untested side and create an inverted strangle. If the price is tested on the put side I would likely sell new 16-30 delta naked puts to further profit from high IV and get more directional for a price pop.
Trade active:
Had sold 2 naked weekly puts (182.5 and 183.5) last week when price was up around 183. That was perfecting timing of the top as price has now fallen down down almost 5 handles so far. Price has also moved back to my 178 strike on my short straddle, which is a near perfect scenario.
The naked short puts added another $2 profit, plus my straddle is $5 in profit currently. I plan on making some adjustments to these positions in the next few days
The naked short puts added another $2 profit, plus my straddle is $5 in profit currently. I plan on making some adjustments to these positions in the next few days
Trade closed manually:
Sold the monthly calls. Left the weekly calls and monthly puts open. This gets my position more directionally long while continuing to sell premium