We hold two June 65 calls (or a multiple thereof) after initially acquiring four of them within pennies of yesterday’s hysterical, V-shaped bottom. Profit-taking during the sharp rally that ensued has lowered our cost basis to 0.84. This trade was designed so that even option novices could take a crack at it. Now, with any luck, you’ll have an opportunity to turn it into a riskless vertical bull spread — riskless in this case meaning a position that will produce a profit of at least $200 per spread if QQQ is trading anywhere above 67 come June expiration, but no financial loss even if it should fall to zero. Accordingly, I’ll recommend offering June 67 calls short for 0.88, day order. Offer one for each June 65 that you are long. _______ UPDATE (May 10, 12:25 a.m.): Continue to offer June 67 calls short at 0.88 as above, good-till-canceled. _______ UPDATE (May 11, 2:47 a.m.): We almost never take straddle risks, since it amounts to doubling down on a bet against the house. But maybe just this once: Buy three June 62 puts (or three for every two calls you hold) for 0.94 or better. I have purposely advised a bid above yesterday’s settlement price because I want you to buy these puts — although not at any price — even if QQQ opens weak.
