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.
If you followed last week's alert, you would be short the $19 call that expires this Friday.
At this point, they are quoted at $.07 and if we closed them we would have a small profit.
Instead of closing the short calls, my suggestion is to turn this into a spread.
My suggestion is to Buy to Open the September 16th-$18 call.
This week's $18 calls are quoted at $.21 to $.32.
Try and buy them for $.25.? You can raise the bid if you don't get filled at $.25.
Assuming you get filled at $.25, the net debit will be 7 cents, with a maximum return of $1.00.
Buy the same number of contracts as the number you sold of the $19 calls.
Do this trade only if you are long the ETE stock.
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September 12, 2016 - MDT Alert (CIEN)