Mad Hedge Fund Trader

July 26, 2016 – MDT Alert (FEYE)

Written by

DougD

in

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 would like to make a suggestion on a stock that has been the subject of buy out rumors.

It appears that it has bottomed and it does have weekly options.

That stock is FireEye Inc (FEYE).

Because it does report next Thursday, I am going to suggest a weekly covered call.

Buy FEYE at the market which is $16.71 as I write this.

Then Sell to Open (1) July 29th – $17 call for every 100 shares you buy.

Try and sell them for $.31 or better.

Based on the nominal portfolio, I suggest limiting the stock purchase to 400 shares or approximately 6.7% allocation.

If the calls are assigned this Friday, the return will be 3.4% for 4 days.

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