RSP calls vs QQQ puts

RSP (equal-weighted SPY) long Sep calls and QQQ Sept puts - a hedge.
I think AI mania will subside, but July is typically a good month for stocks. I may roll them in late August.

 

I don’t think its pair trade. if you put spy and long call rsp for mean reversion, maybe, not sure about the timing., why not just buy rsp?

 

The timing is now because July is historically strong. It is a speculation on divergence and playing options—low cost vs. shorting the QQQs. But shit can happen with China, overbought AI, earnings, etc.

 

You said hedge.

anyway, those 5-8 mega caps need to drop a lot to even out.

 

Ok, hedge or pair trade a same to you? Not to me. Pair trade is long/short a stock/indices. I

 

Pair trade is market neutral. You re bearish on Q and bullish on different version of SPY.