June 1, 2018 - MDT Alert (SYMC)

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 was really beaten down after their last earnings report.

That stock is Symantec Corp. (SYMC).

Pre earnings, SYMC was trading around $29 per share.  It had a massive bearish gap and traded as low as $18.85 after reporting.

There are few reasons I am suggesting SYMC.

First off, it does have weekly options, which I like.  And they carry a decent premium, which I like even better.

And second, it is trading under the lower band on its daily chart.  This tells me that the stock is tremendously oversold.  Of course, it could go lower, but I do believe that risk is small at the moment.

My suggestion is to buy SYMC at the market, which is $20.99.

Then Sell to Open (1) June 8th - $21 Call for every 100 shares you buy.  These are the calls that expire next Friday.

The June 8th - $21 call can be sold for $1.40.

We could sell the $22 call and collect a decent premium, but I would rather be a bit more conservative.  If they are assigned, the return will be 6.6% for a week of holding the stock.

Based on the nominal portfolio, I suggest limiting this position to 300 shares or 6.3% of the nominal portfolio.

Legal Disclaimer

There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.