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QQQQ Options for December 21, 2003
Our mid-term trader has made some trades based on our advice and analysis, he was able to make two promising trades that could lead to a tidy profit.
NOTE: This chart of the week is meant mainly for educational purposes. We don't recommend that our customers follow these exact trades. We suggest that you develop your own trading style and try doing some paper trading before using our volume analytics.
| Security | Return |
| Put #1 (QQQQ January) | +64.00% |
| Call #1 (QQQQ January) | +34.48% |
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Total Profit: |
+$13,000 |
Even though all the above trades were not entirely without risk, we came out on top with a profit of $13,000
Motivations behind Trades: On December 3 after about 10:15, the market began to move higher throughout the rest of the morning. During this move, the market generated two large resistive VMA spikes to the upside at 11:45 and 12:45. In response to these resistive VMA spikes to the upside, we decided to purchase QQQQ puts shortly after 13:00. On December 9, during the market's afternoon decline it generated a very large supportive VMA spike to the downside that began at 14:15 and didn't really subside until the end of the day, so we decided to close all our open put positions and purchase QQQQ calls. As the market opened on December 19, it encountered a single, very large, VMA spike to the upside, so we decided to close all our open call positions.
Why did you trade QQQQ options?
Generally we trade options, and in this case QQQQ (NASDAQ 100 index shares)
options because they offer a high return, but are less risky than futures for
the NASDAQ 100 index. One can trade NASDAQ 100 index futures, QQQQ stocks, QQQQ
options (as we did), or even NASDAQ 100 options on futures. There is a wide
array of trading vehicles that are tied to the NASDAQ 100 index, and it's mostly
up to the individual trader as to which is preferred to trade.
I trade the S&P 500 / SPDRs. How does this apply to me?
The S&P 500 and NASDAQ 100 indexes have generally the same behavior. If you
overlaid a chart of each of them during a short period such as this one, their
general dynamic would be the same. Because of this, you can trade S&P 500 index
shares, and options.
Here is a detailed list of our investor's trades, which netted the above returns:
| Date | Trade | Strike | Expiration | Contracts |
Contract Price |
Amount | Profit |
| 12/03/2003 | Buy Put #1 | $36 | January | 100 | $1.25 | -$12,500 | |
| 12/09/2003 | Sell Put #1 | $36 | January | 100 | $2.05 | +$20,500 | +$8,000 |
| 12/09/2003 | Buy Call #1 | $35 | January | 100 | $1.45 | -$14,500 | |
| 12/19/2003 | Sell Call #1 | $35 | January | 100 | $1.95 | +$19,500 | +$5,000 |
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Total: |
+$13,000 | ||||||
To see any of our past best trades, simply select from the list below.
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To see any of our past best trades, simply select from the list below.
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QQQQ Trading System QQQQ, SPY and DIA trading signals for conservative mid- and long-7 term traders ...
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| RISK STATEMENT: The trading of stocks, futures, commodities, index futures or any other securities has potential rewards, and it also has potential risks involved. Trading may not be suitable for all users of this Website. Analyst research available through this Website does not constitute a recommendation or a solicitation any particular investor should purchase or sell any particular securities. Past performance is not necessarily an indication of future performance. You absolutely must make your own decisions before acting on any information obtained from this Website. |
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