Benzinga | Mar 15, 2021 10:37AM EDT

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 (NASDAQ: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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