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.
Apache Corp reported this morning with a 2 cent miss, and the stock is down $2.50 as I write this.
I do believe it is oversold and should bounce.
My suggestion is to close the short October $52.50 call.
The October $52.50 call can be bought for $.55.
This will result in a profit of $.55 per contract.
Of course with the sell off, our long $47.50 call has dropped in value.
Assuming APA does bounce, I will continue to sell calls against the long position.