{ "vars": { "gtag_id": "AW-11132954046", "config": { "AW-11132954046": { "groups": "default" } } }, "triggers": { } }

Non-Farm payroll tactical trade

06-04-23

Nasdaq has fallen 2% since the start of the week with tech stocks already seeing a sell off in the run up to non-farm payroll Friday. The rotation from tech into value stocks is a story we have seen before earlier in the year. Buying a put on the QQQ Invesco QQQ Trust Series 1 is a great way to gain exposure to the Nasdaq for a much lower cost basis.

Non-farm payrolls are forecasted to be 239k. February NFP came in at 311K causing the market to fall.  If the number is hotter than expected this will signal to the market that the Fed may well keep interest rates higher to get a grip on inflation thus hurting the high growth stocks that comprise the Nasdaq.

 

Buy a Put

Share price: $314
buy 1 QQQ (10-Apr-23) 315 Put for $2

Suggested Trade

Tactical trade opportunity

Buy 1 QQQ (10-Apr-23) 315 Put for $2 

$2x 100 Shares underlying = $200

Potential Trade Outcome

The QQQ ETF in March dropped around 2%. This move would take the QQQ down to around 308.7 

315-308.7= 6.3 x 100 = $630 

This is a 315% return on your investment with just a 2% drop on the underlying. 

Economic data releases create opportunities. Employing the leverage options give you is what makes using options such a flexible, tactical trading tool. 

Written By

Alex Mitchell

Alex Mitchell

DESK BROKER

Important information: Derivative products are considerably higher risk and more complex than more conventional investments, come with a high risk of losing money rapidly due to leverage and are not, therefore, suitable for everyone. Our website offers information about trading in derivative products, but not personal advice. If you’re not sure whether trading in derivative products is right for you, you should contact an independent financial adviser. For more information, please read our Important Derivative Product Trading Notes.

Hide
Important Notice - Show
window.addEventListener('load', function() { if(window.location.href.indexOf('/contact')!=-1) { var timeInt = setInterval(function(){ if (jQuery('.nf-response-msg p:contains("successfully")').is(":visible")) { gtag('event', 'conversion', {'send_to': 'AW-11132954046/gR-uCIO8zvsYEL7Lzbwp'}); clearInterval(timeInt); } },3000); } if(window.location.href.indexOf('/cme-crude-oil')!=-1) { var timeInt1 = setInterval(function(){ if (jQuery('.nf-response-msg p:contains("successfully")').is(":visible")) { gtag('event', 'conversion', {'send_to': 'AW-11132954046/RkuxCIa8zvsYEL7Lzbwp'}); clearInterval(timeInt1); } },3000); } });