December 26, 2018 - MDT Alert (CVX)

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 want to make one more suggestion. This will be a different structure than the covered call I suggested earlier.

The stock is Chevron Corp (CVX).

CVX is trading around $150 as I write this.

My suggestion will be a debit spread.

Here is the set up:

Buy to Open January 18th $105 Call for $1.10

Sell to Open January 18th $108 Call for $0.25

The net debit will be $0.85 per spread. And the total return if CVX moves above to $108 strike price will be $2.15.

Based on the nominal portfolio, limit the trade to a 10 lot or $850.

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