The market is pulling back a bit today. And it has sold off from under the 2,940 level.
I am going to suggest a trade on the overall market, using the SPY.
I am going to suggest an uneven straddle.
As I write this, the SPY is trading for around 291.
My suggestion today is this.
Buy (2) May 29th 291 puts for $5.70
Buy (1) May 29th 292 call for $5.50
The structure puts a bias to the downside. And based on the trade as suggested, the overall risk is 1.7% of the nominal 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
CLVS will most certainly be sold today and I would like to suggest another weekly covered call to replace it.
The stock is iQIYI Inc. (IQ) and like CLVS, it has weekly options.
My suggestion today is to buy IQ at the market, which is $17.44.
Then sell to Open (1) May 15th - $18 Call for every 100 shares you buy.
You should be able to sell them for $0.25 per every option.
Based on the nominal portfolio, limit the share buy in to 300 shares or 5.2% of the portfolio.
Assuming you buy 300 shares, you would sell 3 of the May 15th $8 Calls.
If the calls are assigned next Friday, the return will be 4.6% for one week.
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
Since I recommended UNFI, it has bounced around and has not really made any push.
At this point, I am not going to hold positions that are not moving in our favor.
Therefore, close the UNFI position at the market, which is $10.60.
The result will be a small loss.
Better to move on.
If you traded the 400 lot suggestion, the loss will be $80.
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
Today I would like to make another recommendation on a stock that does have weekly options. And I want to suggest a weekly covered call.
The stock is Harley Davidson Inc. (HOG).
HOG had traded as low as $15 per share and is now trading at $21.70 as I write this.
I would like to make a suggestion similar to the CLVS alert from yesterday.
Buy HOG at the market at $21.70.
Then Sell to Open (1) May 8th - $22 call for every 100 shares you buy.
You should be able to sell the May 8th - $22 calls for $.45.
Limit the stock purchase to 300 shares or 6.5% of the portfolio. If you buy 300 shares, it would mean you would sell 3 calls.
If the calls are assigned this Friday, the return will be 3.5% for 4 days.
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