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
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
AGNC, like a lot of stocks, has made a nice bounce since it bottomed out with the rest of the market.
There is a good possibility it may have peaked out here in the short term.
Therefore, I would like to take this opportunity to collect some call premium.
The last price for the April 3rd - $13.50 call for $0.80
My suggestion is to sell them at $0.80.
These are the calls that expire next Friday.
Assuming you collect the 80 cents, it will mean you would have collected $1.20 in call premium on this position.
If these calls are assigned next Friday, the total return would be 13%.
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
FCX is like a lot of stocks at the moment ... oversold and getting a bounce.
It is moving just above the lower band on its daily chart today and I would like to use this as an opportunity to put on a weekly covered call.
Buy FCX at the market, which is $6.93
Then Sell to Open (1) April 3rd - $7 call for every 100 shares you buy.
These are the calls that expire next Friday.
They can be sold for $0.35 and I suggest you collect the premium.
If the calls are assigned next Friday, the return will be 6% for a week and one half.
Based on the nominal portfolio, limit the trade to 500 shares or 3.4% 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 make a suggestion on another high-yielding stock.
This time the stock is MFA Financial Inc.(MFA).
MFA is trading at $4.20 as I write this. And it is trading about $1.30 under the lower band on its daily chart. So, it is oversold.
They have announced a 20 cent dividend payable on April 30th, to the shareholders of record as of March 31st.
Assuming this dividend holds into the future, the annual return would be 19%.
But, my suggestion is to buy the stock and sell April's monthly $5 call against the stock position.
They can be sold for $0.40.
If MFA stays under $5 by March 31st, you will collect the dividend, as well as the call premium.
The best-case scenario is you collect the dividend and the call premium and are assigned at $5.
If that happens, the return for about a month will be 33%.
If MFA trades above $5 by the record date, you may get assigned on the calls, which is not a bad thing, but rather a gift, as you would be selling the stock in two weeks.
If MFA stays under the lower band, I will continue to sell more calls.
Because of the overall market sell off, limit the trade to 1,000 shares or 4.2% 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