NQH1 Trade on Jan 7, 2021 15:24 from Marius: Tradervue User Stock Trades.

Markets showing recovery and continuing strength across all sectors. QQQ's showed relative strength as was lagging the past 2 days. GA state election runoff and Capital Hill news and uncertainty waining off.

Fundamental Analysis

QQQ has been a relative outperforming index historically and contains many large cap tech and consumer discretionary companies in its portfolio. It has been lagging the past couple days with market cap rotation seen in IWM and IWP. Another close measure with QQQ is IWF because it contains similar growth companies. There was a major shift in continuation in Global and US markets today. Broad participation and breadth across the board.

Quantitative Analysis

Intraday Fundamentals

RVOL 0.986
AVOL 421.129K
ATR 210.51
Short Float 11.83% (QQQ)
Shs Float 477.75M (QQQ)
Inst Own 59.71%
Market Cap 152.72B (QQQ)

Options Statistics + Tape Reading

SI 8.544
IV 27.76%
IVP 24%
P/C 0.992
VWAP 12821.296

SI (relative options volume was higher today at 8x normal). About 5k contracts traded with about an even P/C ratio of 1. Noting more calls traded at ASK and puts at BID indicating the bullish directional flow. Of those delta's of 0-20 at 50%. Although 50% trading at 0-20 delta's which may imply not much conviction. But overall more calls done on ask which weighs on more on the variables.

Noting the sold 12400-12600 puts in the AM session and bought calls around 13000. Level 2 for SPY and QQQ were up but didn't use it has much as these are more HFT algo/program driven but good to have to recognize differences between other securities. Included here for reference purposes.

Options Positioning

OI 147
VOL 376
Delta -.05
Theta -4.37
Vega 1.06
Gamma .00
Prob T 11.20%
Prob ITM 5.62%
MMM +/- 130.603
IV Series 18.24%

Technical Analysis

Daily volume done mostly on the ASK representative of the candle and momentum breakout into ATH's. Noting strong spike then immediate decreased IV which corresponds with the VIX readings. This can imply less volatile implications from an longer-term perspective.

Noting the initial sell-off into the year, volatility, and breakout to retrace the whole downside move. This is actual one of the lagging indices compared to SPX, RUT, and DOW. The momentum from the compression range is notable. VPOC (right volume bars) around 12850 and 12700. AVWAP (blue) from selloff day shows supply/demand absorption and demand taking over.

Trade/Risk Management & Review

Initial thoughts during trade was to start using verticals mainly to manage risk. I have a vertical on a separate testing account in addition to this live one. Should be done the other way around but I have executed this trade before and conviction here is higher. I also did notice I can position a lot larger with the defined risk. Keeping in mind the risk with a spread is only the amount if price goes through the strikes which I don't plan on doing as I will adjust. Noting here that these continued undefined risk positions is highly risky and can potentially put me out of business in an unforeseen and single trade. I'm realizing this now seeing some recent trades go against me with the models with increased perceived risk. Also starting to narrow my directional strikes. This will be a key theme scaling the business. I also do plan on seeking mentorship and coaching for ways to improve.

Trade closed as planned on the live position and spread on the test account. Overnight markets had a bid in place and jobs report was released before the open with a quick sell off but strong reversal. Monitored the trades but ready to make a decision with pre-determined levels and alerts. Managed effectively and learned more with the additional spread. I was already in good size on the live trade. Considering the spread strategy in the future with same parameters but larger size. Keeping in mind the higher commissions but in higher conviction trades and lower risk, this would be ideal for my own edge.

Grade A with trade plan, management, and future development work.