August 5, 2015 - MDT - GOGO Alert Update

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.

GOGO reports earnings tomorrow before the bell.

I am going to suggest a bit of a hedge going into the earnings.

GOGO is trading around $18.25 as I write this and the projected move is about $1.60.

Based on that projection, the upside swing could be to around $20 and the downside is around $16.65.

What I am going to suggest is this:

Buy to Open August 21st $18.50 Put @ $1.15
Sell to Open August 7th - $18 Put @ $.65
Net Debit of $.50

You can enter it as a spread.

My suggestion is to do one spread for every 100 shares you own.

To help cover the cost, I am going to suggest you Sell to Open (1) August 7th-$20 Call for every 100 shares you own.

The August 7th - $20 calls are quoted at $.20 to $.25.

Try and sell then for $25, and if you don't get filled lower it to $.20.

The net affect will be a cost of $.30 per share.