Last Sunday I highlighted a VIX breakout, but left out any option trading strategy. On Monday, VIX spiked to a high of $65 after spending most of the prior week under $20. Also on Monday, the VIX Sep18th $50C went from trading between 0.15-0.25 the week prior to over $5.00. That, in my book, is called leverage and its the only reason we trade options.
Last month SQQQ, the triple leveraged UltraShort QQQ fund, broke out of its long-term downtrend and is on its way to low-to-mid 20's and will likely do so within the next 42 days:
SQQQ Long Term
From its mid-July low SQQQ spiked 62% into last Monday's high. Based on an early EW count and the Fibonacci Extension Tool (two shaded columns on the right) the next leg up will reach at least $14-16. It could reach those levels within the next two weeks, but I recommend going out at least 4 weeks on any call options. Speaking of which:
Minimum expectation is for the $11C, closing Friday at $0.60, to be worth $3.00 to $5.00 before Sep 20th expiration, for a 5X to 8X return.
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