While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to a 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. Read more

I am going to suggest you sell calls against the PRA position.

PRA is trading at $14.21 as I write this.

My suggestion today is to sell the July $15 calls against the stock you hold.

Here is the trade:

Sell to Open July 17th - $15 call for $0.40.

These calls expire in two weeks.

This will bring to $0.80 per share the premium collected on the position.

And if the calls are assigned next Friday, the return will be 12% for slightly over one month.

This alert applies to you only if you own shares in PRA.

Today I would like to make a suggestion on a short term debit spread.

The stock is the CME Group Inc. (CME).

CME is trading around $166.72 as I write this.

I am going to suggest you trade the weekly calls that expire on July 17th.

Because I am not suggesting buying a lot of time, I am going to suggest the debit spread structure.

The idea is that we are looking for CME to follow through from the strong reversal yesterday.

Here is the trade:

Buy to Open July 17 - $167.50 call for $3.50

Sell to Open July 17 - $172.50 call for $1.50.

The net debit will be $2.00 per spread.

Limit the trade to 5 spreads or 1% of the nominal portfolio.

The maximum gain on the position will be $300 per spread or 150%.

BMY is trading around $59.12 as I write this. I am going to suggest you book the profit on the position.

Here is how you close the position:

Sell to Close July 24th - $57 Call for $2.90

Buy to Close July 24th - $63 Call for $0.40

The net credit will be $2.50 per spread. The debit when the trade was initiated was $1.84 per spread.

This results in a gain of $0.66 per spread.

If you traded the suggested six lot, the total cash return will be $396.

The return for one and one-half weeks is 36%.

While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to a 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. Read more