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.
Having said that, I do not want to run the risk of assignment at the $18 strike. Especially when we can
buy the short calls back for a dime.
And that is my suggestion today.
Buy to close the September 2nd – $18 Call for 10 cents.
Based on buying them for 10 cents, we will have captured almost 80% of the value of the calls.
If the stock bounces above $18, I will look to sell more calls for next week.