Strange market anomaly is creating a buying opportunity in the Nasdaq 100
So instead of buying QQQ outright and exposing your portfolio to severe downside risk, buying calls at current option prices is a smarter, capital-efficient way to stay long.
TL;DR
- The Nasdaq-100 Index has achieved significant total returns year-to-date and since the end of 2022.
- The rally is characterized by "low breadth," with a small group of mega-cap tech companies accounting for a large portion of the index's weight and gains.
- Low implied correlation in the Nasdaq-100's options suggests that options on the index are favorably priced.
- Buying QQQ November 760 calls is suggested as a strategy to gain leveraged exposure to the rally with defined risk, limited to the premium paid.
- Potential catalysts like upcoming midterms, tech earnings, and macroeconomic data could lead to significant index movements.