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
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
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
Today, I would like to make one more suggestion. And it is going to be an outright stock purchase.
I do believe the risk on this position is small because it is trading just above the lower band on the daily chart.
The stock is ProAssurance Corp. (PRA).
PRA does not have weekly options, but I am not going to suggest you sell calls against the position at this time.
As I write this, PRA is trading around $14.27.
My suggestion is to buy PRA at the market.
Based on the nominal portfolio, limit the stock buy in to 400 shares or 5.7% of the portfolio.
Today, I would like to make a suggestion on a stock that we traded a few weeks ago.
And that stock is AMN Healthcare Services, Inc. (AMN).
It appears like it is setting up for another run.
I am going to suggest a debit spread and I will suggest you use the July monthly options.
Here is the trade:
Buy to Open July 17th - $45.00 call @ $3.30
Sell to Open July 17th - $50.00 call @ $1.55
The net debit will be $1.75 per spread, with a maximum gain of $3.25 per spread.
The maximum return on the position would be 186% or just under a 2 to 1 return.
Based on the nominal portfolio, limit the trade to 6 spreads or about 1% of the portfolio.
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
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
Today, I am going to suggest an adjustment to the OSTK position.
I am going to suggest you buy back this week's $18 call and roll it out to next week.
Here is how you do that.
My suggestion is to buy back the May 29th call for $0.10.
After you close the position that expires today, then Sell to Open (1) June 5th - $18 call for every 100 shares you own.
The June 5th - $18 call can be sold for $0.75.
You pick up a gain of $1.10 cents per share on the call that expires tomorrow and another $0.75 per share for the calls that expire next Friday.
This brings the total premium collected on this position to $2.25 per share.
The CTXS debit spread has hit a profit of just over 50% in two days, so I am going to suggest you take it.
Here is how you close the position:
Sell to Close June 12th - $138.00 call @ $4.65
Buy to Close June 12th - $142.00 call @ $2.60
The net credit will be $2.05 per spread. And with a debit of $1.35 per spread when the trade was initiated, the gain will be $0.70 per spread.
This results in a gain of 52% in two days.
If you traded the suggested 6 lot, the cash return for two days will be $420 on an investment of $810.
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