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Long-term confidence in Nasdaq 100

Chris McKhann (chris.mckhann@optionmonster.com)

Long-term put selling tops the option trade so far this morning as the PowerShares QQQ Trust has rebounded back to resistance.

A print of 10,000 December 2013 55 puts was sold for $2.31, according to optionMONSTER's real-time tracking systems. Open interest in the strike was a mere 292 at the start of the session, so it is clearly a new position.

The QQQ, tracks the Nasdaq 100, is down fractionally this morning at $65.81. The exchange-traded fund bounced off support at $62 two weeks ago and is now back at resistance at $66, which has been in place for the last six weeks. Shares were up at 12-year highs above $70 in late September.

The put selling is a bet that the QQQ will hold above $55 in the coming year. Shares were below that level briefly last December. The trader is obligated to buy shares if assigned, but at an effective price of $52.69 including the credit from the put sale. (See our Education section)

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