December 21, 2018 - MDT Alert (PHM)
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.
If you followed the alert from about a month ago, you would have put on the short term debit spread on PHM.
As I said in this mornings update, this seems to be the only stock not dropping during this market selloff.
As I write this, PHM is trading 8 cents above the 25.50 strike.
With only an hour and one half until the close, my suggestion is to put in a resting order to sell the calls at 30 cents.
In other words, it will be a good to cancel order.
If PHM does suddenly spike down it will allow you to recoup some of the cost.
The short calls are at the $24 strike, so if PHM does break under the $25 strike and you get filled, I would suggest you close the short $24 puts.
You should be able to close them for a penny or two.
Because we did not buy a lot of time on this trade, the initial risk was limited to just under .5% of the portfolio.
If you're good to cancel order does not get filled, it will become invalid after the close because the options expire today.
