As you know, the markets are closed tomorrow for Good Friday, so I would like to make a suggestion on a covered call in order to capture the time decay over the long holiday weekend.

My suggestion is to buy Frontline Ltd.(FRO), which is trading at $8.58 as I write this.

Then sell to open (1) April 17th - $9 call for every 100 share you buy.

You should be able to sell them for $0.50.

Limit the stock buy in to 500 shares, which works out to 4.3% of the portfolio.

Assuming you buy 500 shares, it will mean you will sell 5 of the April 17th - $9 calls.

I am limiting the trade to less than 5% of the portfolio based on the extreme market conditions at the moment.

If the calls are assigned next Friday, the return will be 10.7% for just over a week.

Because the markets are closed tomorrow, there will not be a daily update.

Enjoy your Easter or Passover.

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

Like most stocks today, FCX is getting a bounce, so I would like to take this as an opportunity to collect some call premium.

FCX is trading around $7.12 as I write this.

My suggestion is going to be to this.

Sell to Open (1) April 17th - $7.50 call for every 100 shares you own.

These are the calls that expire next Friday, which technically are the monthly options.

You should be able to sell them for $.28.

This will bring the amount of option premium collected on this position to $.63.

If the calls are assigned next Friday, the return will be 21%.

7While 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

7While 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