February 20, 2019 - MDT Alert (RIG)

While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to the 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.

Mad Day Trader - Trade Alert - February 20, 2018 (RIG)

RIG is trading around $8.68 as I write this. And I am going to use this little bounce as an opportunity to collect some call premium.

My suggestion today is going to be to sell the calls that expire a week from Friday.

Sell to Open (1) March 1st - $9 call for every 100 shares you buy.

The March 1st - $9 calls can be sold for $.20.

Assuming a fill at 20 cents, it will mean you should have collected 46 cents per share on this position.

If the calls are assigned in two weeks, the return will around 7%.

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