Mike Khouw's QQQ Hedge

On CNBC's "Options Action," Mike Khouw suggested that investors with long exposure in the technology stocks should consider hedging using the Invesco QQQ Trust Series 1 QQQ.

He wants to buy the May $300/$270 put spread and sell the May $340 call for a total cost of $2.50. The options structure offers him protection below $297.50 and it limits his upside potential to $340. If QQQ drops to $270 or lower at the May expiration, the trade would reach its maximal profit of $27.50.

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