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.
I am going to suggest you book your profit on the AMC position. AMC appears to be hitting a short term top, and I would rather protect our
profit, than run the risk of it pulling back.
We can always put the position back on if we get a decent entry.
Buy to Close the April 20th - $15.50 call for $.90.
Once you close the short call position, then sell the shares at the market, which is $16.70.
You will lose $.30 per share on the short call, but overall you should have collected $3.70 per share in prior call sales. This will bring the net call premium collected to $3.40 per share.
In addition, you will earn another $1.46 per in gain on the sale of the stock.
The total gain, including the call option sales, will be $4.86 per share or $1,944, based on the 400 share suggested buy in. On a percent basis the return is 31.8%.