While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to a 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. Read more
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to a 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. Read more
I would like to make one final suggestion today before the market closes.
And it will be on a stock we just recently traded. The stock is Clovis Oncology, Inc. (CLVS).
As you know, CLVS has weekly options and I would like to suggest a weekly covered call.
CLVS made a nice run after the last alert and has pulled back to a point where it appears to be setting up again.
The idea is to buy CLVS and sell next week's options against the long stock position.
Buy CLVS at the market, which is $5.77.
Then Sell to Open (1) October 2nd - $6.00 Call for every 100 shares you own.
You should be able to sell them for $0.26 per every option.
If the calls are assigned next Friday, the return will be about 8.4% for one week.
Based on the nominal portfolio, limit the buy in to 700 shares, which is 4% of the portfolio.
I would like to make another suggestion today and it will be a debit spread on one of the market leaders. The stock is Microsoft Corp. (MSFT).
MSFT reports on October 21st, after the close.
My suggestion is to trade the October monthly expiration options, which is October 16th.
This gives the stock about two weeks to make a move.
Here is how you open the position:
Buy to Open October 21st - $207.50 Call for $6.15
Sell to Open October 21st - $212.50 Call for $3.85
The net debit will be $2.30 per spread.
Based on the tracking portfolio, I suggest you limit the trade to a 2 lot or 1.4% of the portfolio.
The maximum gain on a six lot would be $1,620 or 117%.
I am going to make an adjustment to the QRVO position.
If you followed the original alert from September 10th, you would still be long (2) of the October 16th - $120 Puts.
QRVO has been selling off a bit, along with the overall market.
But, the stock is still above the $120 strike price.
I am going to suggest you sell (2) of the October 16th - $110 puts.
They can be sold for $1.10 and I suggest you collect the cash.
This will reduce the original purchase by $1.10 and still allow you to collect the difference between the $120 and $110 strikes.
Of course, only sell 2 puts if you originally sold 2 of the October $120 puts.
This will turn this position into a debit spread.
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to a 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. Read more
Today, I would like to make a suggestion on a stock we have traded in the past.
The stock is Harley Davidson, Inc. (HOG).
HOG is oversold and is trading relatively flat today, as I write this.
It is oversold by virtue of the fact that it is trading right at its lower band on the 60 minute chart.
I would like to suggest a weekly covered call on the stock and use next week's expiration, which is October 2nd.
HOG is trading right at $23.25 as I write this.
Buy HOG at the market and then execute the sale of this call.
Sell to Open (1) October 2nd - $24.00 Call for every 100 shares you own.
You should be able to sell them for $.45 per every option.
If the calls are assigned next Friday, the return will be about 5.2% for seven days.
Based on the nominal portfolio, limit the buy in to 300 shares, which is 7% of the portfolio.
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to a 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. Read more
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to a 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. Read more
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to a 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. Read more