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.

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: MediaTrading IdeasETFsCarter WorthCNBCMike KhouwOptions Action
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!