Tim Biggam's PowerShares QQQ Trust ETF Trade

Tim Biggam of Delta Derivatives suggested on Bloomberg Markets a bearish options strategy in PowerShares QQQ Trust, Series 1 (ETF) QQQ.

He thinks that over the next couple of months, low beta stocks are going to outperform high beta stocks that are a part of the NASDAQ index. He added that the big tech names have already disappointed.

Biggam wants to sell the December 120 call and buy the December 122 call in PowerShares QQQ Trust, Series 1 (ETF) for a total credit of $0.35. He has decided to sell the call slightly above the all-time highs of PowerShares QQQ Trust, Series 1 (ETF) and if the stock trades below $120 at the December expiration, he is going to collect the premium. The trade starts to lose money above $120.35 and it can maximally lose $1.65.