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.
I would like to make one more suggestion today. And it is on a company that just reported a beat this morning and is in an industry that has been oversold.
The company is Centene Corp. (CNC).
CNC is trading around $49.61 as I write this.
I am going to suggest a debit spread.
Here is the trade:
Buy to Open June $50 call for $2.85
Sell to Open June $55 call for $1.25
The net debit will be $1.60 per spread, with a maximum gain of $3.40 or 212%.
The volume on these calls is high enough where getting a fill should be relatively easy.
Limit the trade to a 6 lot based on the nominal portfolio or 1%.
