A substantial $24 million options trade on the Invesco QQQ Trust ETF signals a strong bullish outlook for the Nasdaq 100, with one trader placing a high-conviction bet on the index reaching new all-time highs by the end of July. This significant investment comes despite recent market consolidation.

The trade involves a complex call spread, aiming for the Nasdaq 100 to surge past its previous highs, a move that would yield substantial profits if realized.

Massive $24 Million Options Bet Signals Nasdaq 100 Poised for New Highs

A colossal $24 million options trade on the Invesco QQQ Trust ETF suggests a strong bullish sentiment for the Nasdaq 100, with expectations of the index reaching all-time highs by the end of July. This high-conviction bet, the third-largest options trade on Thursday, comes despite recent market volatility that has seen the Nasdaq 100 trade flat since mid-May.

The Nasdaq MarketSite in New York, US. (Michael Nagle | Bloomberg | Getty Images)

Tech bulls may find renewed optimism as a significant options trade on the Invesco QQQ Trust ETF ( QQQ ) on Thursday signals a potential rally. Traders are noting a massive $24 million, three-part call spread that bets on the Nasdaq 100 index achieving an all-time high before the month concludes. This bold directional wager ranked as the third-largest options transaction across all exchanges for the day.

Despite recent fluctuations, the Nasdaq 100 ( .NDX ) has remained relatively stagnant, trading in a narrow range since May 14. The index last touched a record high on June 3, with a substantial portion of options activity concentrating around the $710 mark, according to data from ThinkOrSwim. Concurrently, the S&P 500 ( .SPX ) has been confined to a roughly 200-point range since early May.

The centerpiece of this bullish strategy, initiated about 90 minutes after the market opened, involved the purchase of 28,000 calls with a strike price of $736, expiring on July 31, for a staggering $30 million. To mitigate costs, the trader simultaneously sold $6 million worth of a 730/740-strike call spread, also expiring on July 31. This maneuver adjusted the breakeven point to approximately $750, positioning it less than $2 above the QQQ's early June high.

Invesco QQQ Trust, YTD

"If he doesn't have another position against this, he needs Qs to explode higher," commented Scott Bauer, CEO of Prosper Trading Academy. "The spread reduces his cost but pushes up the level for the breakeven. If the index just grinds he's going to get killed."

Adding another layer to the analysis, the open interest in the 736-strike calls matched the volume of the trade at the time of execution. This could imply the trader was buying back previously sold calls, a potentially lower-conviction move but one that still suggests a neutral to positive outlook on the index.

Out of the $1.6 billion in QQQ options traded on Thursday, $944 million was allocated to calls. However, data from SpotGamma indicates a near balance between call purchases and sales, with ThinkOrSwim data suggesting an equal number of contracts bought and sold for both puts and calls.

While the $24 million QQQ trade captured attention for its clear directional bias, another significant bullish trade was observed in the SPDR S&P 500 ETF Trust (SPY). In that fund, a substantial $50 million was invested in 2,000 deep in-the-money 500-strike calls expiring on July 24.

The second-largest trade of the day occurred in the nuclear energy company Oklo ( OKLO ), where an investor acquired $46 million worth of 200-strike calls set to expire in January 2028. An additional $21 million was placed on 90-strike calls with a mid-December expiration. The stock is currently trading at $50.