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.
As you know, I suggested trading BERY based on the fact that the stock was oversold and riding under the lower band on the daily chart.
And you should have traded around the position, so the risk has been reduced.
BERY reports tomorrow before the open and I would like to reduce the risk even more.
I am going to suggest you turn the position into a debit spread going into earnings.
My suggestion is the Sell to Open (1) September $55 call for every September $50 calls you own.
The September $55 calls can be sold for $.40.
This will reduce the cost of the September calls to $2.30 per option.
Based on the suggested six lot when the position was initiated, you will put $240 in your account.
Of course, this alert only applies if you are long the September $50 calls.