QQQQ OPTION SPREAD IDEAS GOING INTO OPX

Sunday Aug 9, 2009
Here we are at the start of the week before OPX wk.

Fujisan at Evil Spec has a bear call vertical credit spread play for the Q's that will show a profit if the Q's ($39.88) stay under $40 going into OPX Fri Aug 21. They are banking on chart work showing resistance at $40. Seems a little risky. (spread could also be done as a bear put vertical debit spread)

sell (short) Aug 40 Call $.63/.64
buy (long) Aug 41 Call $.24/.27

credit $.37, risk $1.00-.37=$.63
With 10 contracts, risk $630 to make $370.

From last week, Sat Aug 1, (Q's, $39.45 ) Marco had a bull call vertical debit spread for the Q's that will have a max profit if the Q's close at or above $40. The Q's must close at or above higher end of the spread at expiration to get the maximum profit from the strategy. It is possible to lose 100% of the investment if the Q's close below the lower end of the spread. The spread must be closed out ("sold") to obtain the gain. If Q's go in the direction desired, up, the spread should increase in value to a max of $2.00. (Could also be done as a bull put vertical credit spread)

buy (long) Aug 38 Call $1.80
sell (short) Aug 40 Call $.59

debit $1.21, max gain $2.00- 1.21=$.79

With 10 contracts, risk $1,210 to make $790.
With 2 contracts, risk $242 to make $158.