The AI trade is cracking. Here's how to profit

The article says the AI trade shows cracks: concerns over OpenAI's revenue growth have hit neocloud stocks, chips are selling off on worries about Chinese competition, and the Fed hiked rates for the first time since 2023 in September. Even so, QQQ's IVx sits at 20.7%, level with IWM and above SPY's 15%, and has stayed at least three points above realized volatility for 29 straight sessions. The author sells the 720/710 put spread expiring November 13 for a credit of about $1.81, with maximum profit of $181 if QQQ stays above $720, maximum loss of $819 if it closes below $710, and a breakeven of $718.19. Key risks include CPI, Taiwan Semiconductor earnings, and Microsoft and Alphabet results alongside the October 28 Fed decision, so the article suggests considering closing or rolling the trade before expiration.

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