SPXS & SQQQ Calls – Buying Long Options Into Short Convictions

This week I bought some options, mostly targeting Inverse S&P 500 & Inverse NASDAQ Index ETNs. This enables me to have a pessimistic view of markets in the near-to-mid term, without taking the risk of playing the Volatility ETN game with long positions.

$9 & $10 SPXS Call Options With A 10/16/2020 Expiration

I purchased some $9 & $10 call options that expire by the 16th of October this year. This enables me to sell SPXS for $9 & $10 based on each contract before that date, regardless of the price.

The best profits will be if it climbs above those levels, as the options are then “in-the-money”, and can be exercised at a discount to the current share price.

Given it’s recent performance & the current state of markets, I can see both price points going into the money within that time period. If they do, selling the options then will be great.

If not, I can sell them prior to that date, still profiting, while giving the rest of the risk from the current price to the $9 & $10 Strike Prices until the expiration date.

$10 SQQQ Call Options With a 6/5/2020 Expiration

Looking to add a little more short term risk, I also bought some $10 SQQQ call options that expire on 6/5/2020. The NASDAQ will likely lose steam the fastest of the indexes, given that it has benefitted the most from speculative long-positions since March.

Given the recent global situations between COVID-19 & civil unrest/uprisings, there should be enough issues plaguing the markets to put these options in the money, and at the bare minimum making them able to be flipped for a profit before the expiration at the end of the week.

Based on the existing plays I had going for SQQQ longs, this complements it well, and risks much less money with more to gain.