RSP calls vs QQQ puts

[TimtheEnchanter]

RSP (equal-weighted SPY) long Sep calls and QQQ Sept puts - a hedge.
I think AI mania will subside, but July is typically a good month for stocks. I may roll them in late August.

 

[mervyn]

I don’t think its pair trade. if you put spy and long call rsp for mean reversion, maybe, not sure about the timing., why not just buy rsp?

 

[TimtheEnchanter]

The timing is now because July is historically strong. It is a speculation on divergence and playing options—low cost vs. shorting the QQQs. But shit can happen with China, overbought AI, earnings, etc.

 

[mervyn]

You said hedge.

anyway, those 5-8 mega caps need to drop a lot to even out.

 

[TimtheEnchanter]

Ok, hedge or pair trade a same to you? Not to me. Pair trade is long/short a stock/indices. I

 

[mervyn]

Pair trade is market neutral. You re bearish on Q and bullish on different version of SPY.