Options Trading News

February 28, 2014  Fri 11:06 AM CT

The PowerShares QQQ Trust has climbed to new 13-year highs, but a large trade is betting that further gains will be limited.

optionMONSTER's tracking systems detected the sale of 13,800 June 98.63 calls for the bid price of $0.31 today. This is clearly a new position, as the volume was 10 times the previous open interest in the strike. (The QQQ strikes have been adjusted for the special dividend with a record date of March 3.)

The call seller is betting that the QQQ won't be above that $98.63 strike price by expiration in mid-June. The contracts could have been sold naked with an initial bearish bias or traded against long shares in a covered-call strategy. (See our Education section)

The QQQ is up 0.43 percent to $90.83 in midday trading after climbing to $90.96 in the morning, its highest price since September 2000. The exchange-traded fund, which tracks the Nasdaq 100, was down at support around $84 in early February. 
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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