Trade details for QQQ: 159/149 Put Vertical Debit Spread @ $2.97 Prob. of Max Profit = 18.00% Prob. of Max Loss = 43.96% Break-even @ $156.03 52 D.T.E.
Trade plan: QQQ identified to be overbought + sign of weakness compared to recent rally. SPY & QQQ are highly correlating, with QQQ as more volatile mover (suitable for debit spread). Feb. expiration has sufficient premium for credit spread + room for adjustment during trade if needed Built credit spread in SPY + Built debit spread in QQQ
For QQQ debit spread: Expecting QQQ to breach $152 level by expiration. Expecting to possible adjust with naked put or put vertical spread if market rallies strongly to breach & stay above $160 level. Max risk reduced by 12% from SPY side of trade with market rally. Unlikely max profit of $703 if market plunges to $149 level. Check SPY side of pairs trade for more information.
Komen
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Adjustment: Due to break out of expected range early in trade. 149/139 Put Vertical Credit @ 0.41 Converted Debit QQQ into QQQ Put Butterfly
New position: 159/149/139 Put Butterfly Debit Spread @ $2.56 13% reduction in Max Loss
Expecting to take profit IF price drifts between $159 and $139 to further reduce risk exposure for trade.