September 9, 2015 - MDT Alert WDC

?While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Bill Davis, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points.Today I am going to suggest another trade on WDC.

And I am going to suggest you use the front week options, which means this trade will be limited to a 1% allocation.

Therefore, the total allocation will be $1,000 based on a $100,000 portfolio.

Here is how I suggest you trade this.

Use 1/2 the allocation to buy the at the money $83 calls that expire this Friday.

They are quoted at $.88 to $1.03, so you should be able to buy 5 of them.

Then use the balance to buy the $85 calls, which are quoted at $.20 to $.29.

Based on a fill of $.25, you should be able to buy 20 contracts.

If WDC can rally to $85, I will suggest to close the $83 calls and let the $85 calls run.

Remember, these are the calls that expire September 11th.

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