2025 has been frustrating for buy-and-hold investors.
The “on again, off again” tariffs have created uncertainty. (And that’s not even counting reciprocal tariffs.) Plus, the economy is showing mixed signals. That has investors worried about a potential recession.
All that unrest has found its way into the markets…
The Invesco QQQ Trust Series 1 (QQQ) is trading lower than where it started the year. And there have been around a dozen moves and counter-moves during that time.
Many folks head to the sidelines during this type of choppy market.
But rather than getting frustrated, you just need to adjust your strategy to suit the current conditions. I’ve done that by introducing “zero days to expiration” (0DTE) options to my Opportunistic Trader members…
We enter and exit an option trade on the same day as (or the day before) the option’s expiration.
Earlier this month, we did a 0DTE trade on QQQ that generated a blended 94.5% profit within a day. That came after a 0DTE win on Palantir Technologies (PLTR).
Today, I want to share a 0DTE trade we closed on QQQ this week that handed us a 72.3% gain in a day.
So let’s see how we did it…
Sharp Reversals
QQQ has been very choppy this year. And nimble traders have had the chance to bank quick profits.
Take the big down move that kicked off in late February. We seized on a countertrend rally to generate a 94.5% gain inside of a day.
Invesco QQQ Trust Series 1 (QQQ)
Source: eSignal
After QQQ’s big down move bottomed out in the middle of the month, we saw another opportunity.
QQQ had gotten overstretched to the downside and was setting itself up for a bounce.
That coincided with the Relative Strength Index (RSI) regaining momentum from oversold territory (lower gray dashed line at the 30% level). Rising momentum helped push QQQ higher.
Fear around tariffs briefly subsided, enhancing the relief rally. Plus, we got confirmation from the Federal Reserve that it was still on target for two rate cuts in the second half of the year.
However, the counter-rally started looking overdone…
The RSI was touching resistance (green line). That can be a precursor to a reversal.
Additionally, tariffs would likely remain inflationary and damage the economy and markets. Their effects would not be “transitory,” as the Fed claimed…
So to capture a potential reversal lower, we bought a 0DTE put option on Tuesday that expired on Wednesday. As I mentioned, we sometimes enter a day early if the right setup appears – just as we did here.
And as things turned out, we made the right decision…
Take another look:
Invesco QQQ Trust Series 1 (QQQ)
Source: eSignal
On Wednesday, QQQ opened lower, briefly rallied… and then rolled over and fell heavily. We closed out our trade for a 72.3% gain.
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Quickfire Gains
To be clear, we generated this gain on QQQ using 0DTE options. Options use leverage, so they magnify gains and losses compared to just trading shares.
And with such a short time to expiration, these quickfire gains can quickly turn into losses if the stock moves against our position. That’s why we have to stay on top of these trades and act quickly.
Additionally, risk management remains key.
I recommend being conservative with position sizes and only risking a small portion of your trading funds with each trade.
But as you can see from our trades so far, 0DTE can be a great strategy to profit from a choppy market. I’ll continue to scour the market for our next opportunity.
So if you’d like to learn more about this kind of trading, be sure to check out my recent interview where I explained how this strategy can hand you solid profits practically overnight.
Regards,
Larry Benedict
Editor, Trading With Larry Benedict