Carter Worth And Mike Khouw's QQQ Hedge

On CNBC's "Options Action," Carter Worth said that Invesco QQQ Trust Series 1 QQQ is up seven weeks in a row and it reached its all-time high last week.

The pattern has happened only 17 times before the last week and after such a run, QQQ's average move was 0.89% higher in week 8, 0.34% higher in week 9 and 0.03% higher in week 10. Worth said that the odds of market trading higher in week 8 are 82.35%, while for the next two weeks it is 50-50. He would consider trimming a long position or selling premium.

Mike Khouw suggested that investors should consider hedging a long position in QQQ. He would buy the September $355/$330 put spread for $5.89. The trade breaks even at $349.11 or 2.66% below the closing price on Friday. Its maximal profit is $19.11 and it can be achieved if QQQ drops to $330 or lower at the September expiration. Khouw said that the hedge can be used for QQQ or major constituents of QQQ.