Trade Details & Summary

QQQ Put Calendar Spread (LIVE Closing Trade)

Put calendar spreads profit from either a directional move lower in the stock and/or rising implied volatility, of which we got both for this profitable QQQ trade this month.

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In this live trading video what we're going to try to do is close out of our put calendar spread that we have in the queues. We've got a couple put calendar spreads. The They're starting to finally come into a profitable zone here.

In particular, this put calendar spread in the queues which are the NASDAQ ETF ticker symbol QQ, has recently come in just a little bit more today. It's Monday after the market opened, about 20 minutes after the market opened.

Now we have these as the June/July contracts, so we sold the June contracts on the 16 put strike and then, we bought the July contract, same put strike 106 on both ends. We consider basically the expiration date for these calendars as the front months.

We don't typically like to hold them through the July cycle as a long option; we’ll close them out at the front month which in this case is Friday since expiration is later this week. We have to do something with this position.

Now, in this case, the position doesn't reach our full profit target yet but we're going to go ahead and close out because we've made a little bit of money on it. We’re up about 70 bucks. It’s not a huge trade but as we get closer to expiration we just have to make a decision of what we want to do here with this position.

Now, the queues are falling today, which is good. They moved open up about 40 basis points lower and then we've got that nice little quick pop in volatility which actually helped out and gave us a little boost in this position.

Again, these calendars profit from a rise in applied volatility. That's one of the best ways that they can potentially make money. Queues are trading right about here right now. This is our calendar.

Again, the best area for us to see this market close is around 106, but maybe that might be a little bit of a pipe dream given that the markets are not so volatile right now.

What we’re going to do is we're going to go ahead and close out this entire calendar. We're going to enter our order for all of these contracts to close out. The market’s trading right now about 117.

We're going to try to get fills here at about 118 and try to get out a little bit better pricing. It might take a little bit longer to fill, but I think it's worth it maybe just to shoot for a little bit higher credit.

Again, this case you can see the credit that we're shooting for is 118. Market right now is about 17-1/2. It might take a little bit to actually fill this trade today but we're going to try to stretch here a little bit given that the markets are down and kind of let him come to us and see what we get. We'll pause this video and come back as soon as we get filled.

All right, so we're back here. It did take a little bit to actually get filled on this trade but a little bit of patients actually pays off. We got filled at about 11:30, so about slightly less than two hours after we actually place the order.

Had to wait a little bit for market to come back into our range. We are out here with the 118 credit, so a nice little profit on our QQQ put calendar spread. Not as big as we wanted but, again, as we get closer to expiration, it's important that you take some of these things off the table and keep moving forward.

As always, hope you guys enjoy these videos. If you have any comments or questions, please ask them in the comments section right below. Until next time, happy trading.

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