3 ms·

For the last week or so I’ve been buying ATM QQQ call spreads and rolling them up and out as they become ITM. I’m up 100% in one week, this is silly.

• umvi 6y ago
  Mind expanding the acronyms and explaining what exactly you've done? I'm still an investing novice.
  • xondono 6y ago
    Not OP, but anyway these are the terms you want to search: - ATM: At The Money - ITM: In The Money - QQQ: Invesco QQQ Trust
  • tryptophan 6y ago
    He is doing leveraged bets that the QQQ stock fund will go up a certain amount. When it goes up to that certain amount, he makes another bet it will go up again.
    • marketgod 6y ago
      At the same time he is using a call spread so the upside is limited to the difference between the contract he bought and sold. Also at the same time, losses are limited. Suppose $TWTR is $49 a share, you buy a call for $50 and sell a call for $60. Suppose the $50 call is $3 that means you paid $3. Then you sell the $60 for suppose $1. So now you are out $2. That's your max loss. Now tomorrow $TWTR goes to $35. Everything expires and you lose $2. Suppose it goes to $300. Then your profits are ($60-50)-$2=$8 Profits Suppose it went to $55. Suppose this is after expiry, then your contract is worth $5 but you paid $3 so you made $2 profit, but you also sold 1 contract, so now you have $3 profits. So in essence, the spread limits your upside, further limits your downside while you are bullish.