Last Friday, MSFT’s closing price made a statement as it pushed the company’s market cap over $1 trillion for the first time, and yesterday it extended its rally to add an exclamation point. Apparently MSFT has become a growth story based in part on its next-gen gaming platform given the naughty-meme-worthy name, Project Scarlett. Enjoying MSFT’s rally is QQQ, of which MSFT is the largest component. AMZN, AAPL, FB and even GOOGL have helped push QQQ up for five days straight, too, but none as much as MSFT. The market is feeling confident about the easing trade tensions and hopeful about a rate cut. But maybe too confident and hopeful. VXN, the QQQ vol index, is lower, but not as low as it was on previous QQQ rallies. That suggests a surprise in any of the market’s bullish assumptions could whack the QQQ’s back down. If you are considering a bearish strategy in QQQ, the long put vertical that’s short the 182.5 put and long the 184.5 put in the July weekly expiration with 45 DTE is a bearish strategy that has a 60% prob of making 50% of its max profit before expiry and that generates $.17 of positive daily theta.
Opened 19/06/11 for $.76 debit
Closed 19/06/17 for $.80 credit