While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to the 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.
It looks like we are getting the bounce from this oversold condition and as a result, I am going to suggest you close the NFLX trade I suggested yesterday.
Here is how you close it:
Sell to Close October 25th - $265 put for $18.40
Buy to Close October 25th - $260 put for $15.60
The result is a credit of $2.80 per spread.
The spread cost $250 to place, so it results in a small overnight profit of $30 per spread.
Based on the suggested 4 lot, the cash return will be $120 or 12% for one day.
