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.
Weekly Expiration Update:
CIEN is trading well under the $24.50 strike, so they will expire worthless today.
If you used the full allocation, the cash return will be $720.
I will look to sell another round of calls against the October long calls next week.
The second position is the short $17 call on ETE.? ETE is trading around $16.86 as I write this.? This is only 14 cents under the strike.?
My suggestion is to leave the calls alone and let’s see if the stock settles under $17 at the close.
If it does, the calls will expire worthless.? If it ends up closing above $17, the calls will be assigned and you will sell your shares at $17.
In both cases you keep the premium.
By the way, if the calls are assigned, the return on ETE will be around 40%, based on the gain and the premium collected. This does not include a few quarters of distributions which is on top of the 40%.
The final deal is P.? If you followed the alerts, you should be short the $14 call that expires today.
P is trading around $14.31 or about 30 cents above the strike.
My suggestion is to let the calls be assigned.
Based on the prior calls you sold and the gain on sale, the overall return will be about 15%. Not tremendous, but a gain none the less.
I would rather move on and look for other opportunities.
Enjoy your weekend.