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.
Today, I would like to make an adjustment to the DVA strangle.
I am going to suggest you sell another round of calls against your long call position.
But, I am not going to suggest you sell the November 15th calls, instead I will use the November 8th expiration day.
Technically, this will turn the long $57.50 call into a calendar spread.
With the shorter expiration, it will mean there are 8 days until expiration.
Here is the trade:
Sell to open (1) November 8th - $61.50 call for every $57.50 calls you own.
You should be able to sell then for $0.80.
If you followed the original alert, the suggested position size was three calls, so you would see 3 calls if you followed the original alert.