A huge trade just happened on the Nasdaq 100. Bulls are taking notice

If the market’s biggest trade happens, tech bulls may not have to wait much longer for new highs. Invesco QQQ Trust ETF Thursday is any indication.

The trader spent $24 million on a three-part call spread that required the Nasdaq-100 index to hit an all-time high by the end of this month; It’s a high-conviction one-way bet and the third-largest trade of all options exchanged on Thursday.

Despite recent fluctuations Nasdaq 100 It has been virtually flat since May 14. The index last peaked on June 3, with most options volume concentrated at the $710 level, according to data from ThinkOrSwim. At the same time S&P 500 It has been trading in a range of around 200 points since early May.

The bulk of the bullish position, executed approximately 90 minutes after the opening bell, was a $30 million purchase of 28,000 736 strike calls expiring on July 31. At the same time, the individual sold a $6 million 730/740 strike call spread expiring on the same date, which reduced the cost of the transaction but pushed the breakeven point to about $750, $2 below QQQ. It has been high since the beginning of June.

“Unless they have another stance on this, Qs need to move higher,” Scott Bauer, CEO of Chicago-based Prosper Trading Academy, said by phone. “It lowers the cost of the spread but raises the breakeven level. If the index worsens, it will die.”

Open interest in 736-strike calls was equal to trading volume at the time of trading; This suggests that the trader may have repurchased the calls he sold, possibly a lower-conviction transaction but one that still reflects a neutral or positive view of the index.

Of the $1.6 billion in QQQ options traded Thursday, $944 million were tied to calls, according to SpotGamma data; but ThinkOrSwim data shows that as many calls were sold as there were purchased. Almost the same number of contracts were sold as contracts were purchased for both puts and calls.

While the $24 million trade attracted attention with its clear directional trend, one of the two largest trades of the day in the S&P 500 ETF SPY was also in an upward trend.

In this fund, someone purchased 2,000 deeply profitable 500 strike calls expiring on July 24 for $50 million.

The second biggest trade of the day was in the nuclear business okloSomeone purchased a $46 million 200-strike call expiring in January 2028, as well as a $21 million 90-strike call expiring in mid-December. The stock is currently trading at $50.