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 would like to make a suggestion on a stock with weekly options.
Like all stocks as of late, it is oversold.
The stock is VIPS and is trading just under $19 per share.
The August 28th - $19 call can be sold for about 75 cents.
My suggestion is to buy with a 1/2 allocation, which rounded will be 300 shares.
Then Sell to Open 3 of the August 28th - $19 calls for 75 cents.
Assuming they get assigned this Friday, the return will be about 4.3%.
Depending upon how VIPS trades, I would add the second half to the position and continue to sell call options.
There are a few stocks I am looking at for a late day entry, if it sets up.?