A significant trade occurred on the Nasdaq 100, indicating that tech bulls may soon see fresh highs. A trader spent $24 million on a three-part call spread that requires the Nasdaq-100 index to reach an all-time high by the end of this month.
Despite recent volatility, the Nasdaq 100 has remained effectively flat since May 14. The index last peaked on June 3, with most options volume centered around the $710 level.
The main component of the bullish position, executed about 90 minutes after the opening bell, was a $30 million purchase of 28,000 736-strike calls expiring July 31. At the same time, the trader sold $6 million worth of the 730/740-strike call spread, lowering the cost of the trade but pushing the breakeven level up to about $750.
“If he doesn’t have another position against this, he needs Qs to explode higher,” said Scott Bauer, CEO of Chicago-based Prosper Trading Academy.
On Thursday, $1.6 billion in QQQ options were traded, with $944 million tied to calls.
