Paper sold the QQQ Feb 85 put & bought the QQQ Feb 112 call paying .33 in what appeared to be an opening trade of a risk reversal.
Powershares QQQ Trust, trading at 103.85, down .16, is seeing bullish action today.? The ETF, with an ADV of 457k contracts and an OI of 3.5 million, saw a trader put on a bull risk reversal.? A trader sold the Feb 85 put and bought the Feb 112 call and paid .33 in what appeared to be an opening trade of a risk reversal.
This trade is a way of replacing stock while setting a low floor at expiration where the trader could be ?put too.?? If the stock takes off the 112 calls will quickly begin to gain value and the trader may be able to sell ?risky? back at a nice profit.
This trade should be considered aggressively bullish the market and bearish volatility.