January 16, 2020 - MDT Alert (DBX)

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.

I am going to suggest you close the DBX position. If you followed the alert on December 16th, you would have bought shares in DBX.

On the 17th, I suggested selling the January 31st- $17 call against the position.

Th call I recommended was slightly in the money. And the suggestion was made for more of a protection trade. Call it a hedge.

DBX actually rallied from that point and now trades around $18.22.

Here is how you close the trade:

Buy to Close the January 31st - $17 call for $1.30

Then sell the shares at $18.22.

This will result in a gain of $176. If the position is held to the 31st, the maximum gain would be $210. So, I would rather close the position now and look for another deal.

The return will be about 2.6% for holding the stock for about a month.