QQQ – 07/07/2016

I decided to attempt more of a scalp strategy with one of my standard time decay strategies. I have really not had much luck with scalping the market using these strategies as this trade will continue to show.

On 7/7 with QQQ trading at $108.39 I purchased the July week 3 $112 Puts for $3.65 and sold the July week 2 $110.00 Puts for $1.65. I paid $2 for the spread which was not ideal, by paying that much I would really need QQQ to finish pretty close to $110 the next day to make money, below that I was at a break even on the trade. On 7/8 the market had not moved like I wanted so I repurchased the $110 expiring that day and decided to sell the July week 3 $113 Put for $2.71 which made this a credit spread because the market had moved up.

This had become kind of a weird trade now so on 7/13 with QQQ at $111.87 I decided to just close the trade for as close to break even as I could. I could have rolled the entire position to the next week and perhaps made a little as long as QQQ stayed between $110.00 an $112.30 but decided it was not worth the risk.

I never like to lose money, but I entered this trade for to much money when I started. I paid $2.00 ($3.65 – $1.65) when I should have paid between $1.60 and $1.80 which is why I ultimately lost money. I will sometimes do this if there is enough volatility in the prices but it is risky on these types of trades.

Date	Sym	Action	Exp	Strike	Price	Cont	Type	Cost	Balance
07/07/16	QQQ	BTO	7WK3	112	-$3.65	5	Put	-$1,825.00	-$1,825.00
07/07/16	QQQ	STO	7WK2	110	$1.65	5	Put	$825.00	-$1,000.00
07/08/16	QQQ	BTC	7WK2	110	-$0.02	5	Put	-$10.00	-$1,010.00
07/08/16	QQQ	STO	7WK3	113	$2.71	5	Put	$1,355.00	$345.00
07/13/16	QQQ	STC	7WK3	112	$0.41	5	Put	$205.00	$550.00
07/13/16	QQQ	BTC	7WK3	1113	-$1.18	5	Put	-$590.00	-$40.00