Why the heck are my QQQ put options not up more?

[SoyUnGanador]

Choosing an OTM option too far out with improbable odds of coming near the strike before expiration. Is a classic beginner mistake.

I was just doing it to hedge my TQQQs. You are calling that a mistake, but SHOULD work out nicely, if the market continues to go down they SHOULD (I think) go up considerably, offsetting my losses on the TQQQs. In theory anyways haha.

 

[MrMuppet]

In a helpful fashion, what SIMPLE factors would you suggest newbies consider when looking at trading an option when the trader wants to use options to short the QQQ?
For a Newb, Would 40% Delta be close enough to ITM to consider - and what else would be SIMPLE and effective for this approach of simply buying a put on the QQQ in order to profit from the possible down move, that has indeed occured.
Even in hindsight, What was the optimal Put to have purchased?

buy calls, hedge delta->win through vol and skew

 

[GotherL]

I was just doing it to hedge my TQQQs. You are calling that a mistake, but SHOULD work out nicely, if the market continues to go down they SHOULD (I think) go up considerably, offsetting my losses on the TQQQs. In theory anyways haha.

Well as longest your aware those hedge puts had a very high improbability of recovering any TQQQ loss you may incur.

Which doesn't seem like the case. Otherwise, you wouldn't be here asking why your puts are not up more.

 

[ajacobson]

For what it's worth you should look at VXN - QQQ volatility when trading and closely examine the OTM skew. Simply, you may have bought the wrong options for your view.

 

[xandman]

Seems like wings are relatively expensive now.

 

[easymon1]

buy calls, hedge delta->win through vol and skew

As for which calls for a newb to buy, is a 40 Delta generally better or worse than a 50 Delta or a 30 Delta, given a negagive view of far out of the money options?

 

[Zwaen]

I would think at the inflection point/area of the 2nd der. on the curve?

 

[easymon1]

I bought some puts on the QQQ basically at the market top when QQQ was around 400. The strikes run from 300 to 310. I bought them cheap because they were so out-of-the-money - VIX was low and no one was thinking about this sort of downturn.

So the market has taken a HUGE hit. QQQ down to the 350 level, at least halfway or more to the strike price. But my QQQ puts have only gone up in value a little!

I get that they are still out-of-the-money, but they are a lot closer to being in the money than they were! I would have thought given the new hysteria in the market they would have become more pricey. Is the fact that they haven't gone up all that much a sign that maybe people thing the downside will come to an end soon, and thus there will be no benefit from those 300 - 310 strikes?

I assume that if the market continues to go down and gets close to the strike they will have to start going up in value dramatically, and once the QQQ price goes below strike it has to increase at least in value dollar/dollar with the QQQ decrease?

Thanks!

How did you determine that the QQQ could fall?
Do you have trade setups and entry triggers?

 

[LM3886]

I was just doing it to hedge my TQQQs. You are calling that a mistake, but SHOULD work out nicely, if the market continues to go down they SHOULD (I think) go up considerably, offsetting my losses on the TQQQs. In theory anyways haha.

How many days till expiration were the puts when you bought them? If they were just a few months away from expiration then they might have lost much time value during the process. Might be a good idea to buy the leaps if deep OTM for enough protection.

 

[Nine_Ender]

I was just doing it to hedge my TQQQs. You are calling that a mistake, but SHOULD work out nicely, if the market continues to go down they SHOULD (I think) go up considerably, offsetting my losses on the TQQQs. In theory anyways haha.

Why the hell would you have TQQQ right now if you think QQQ is going down ? And why are you buying options you don't understand at all ? You could in fact see your puts go to zero later this year and lose money on your TQQQs.