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
PRA has been trading in a range since the position was put on.
And as I write this, it is trading around $15.27.
We can collect $.20 per share by selling the November monthly calls against the position and that is what I suggest you do.
Here is the trade:
Sell to November 20th - $17.50 call for $.20.
These calls expire in two weeks.
This will bring to $1.00 per share the premium collected on the position.
And if the calls are assigned on the 20th, the return will be 12.5%.
Only sell these calls if you are long the stock. And sell 1 call for every 100 shares you own.
This alert applies to you only if you own shares in PRA.
I would like to make a suggestion on a covered call. And it is on a stock that does have weekly options.
And they already reported and do not report again until January 2021.
The stock is Alcoa Corp. (AA).
AA is trading around $13.98 as I write this. And it is trading right around the key midband level on its daily chart.
My suggestion today is to buy AA at the market, which is $13.98.
Then Sell to Open (1) November 13th $14.50 call for every 100 shares you buy.
These calls can be sold for $.25.
If these calls are assigned next Friday, the return will be 5.5% for 6 trading days.
Based on the nominal tracking portfolio, I suggest a limit of 500 shares or 7% of the portfolio.
Remember to sell the calls that expire next Friday.
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
Call me skittish or anything you would like, but I am going to suggest you book the one day profit in the MAS position.
Especially, when you can book a one-day 60% return.
Here is how you close the trade.
Sell to Close November 20th - $55.00 Call for $3.60
Buy to Close November 20th - $60.00 Call for $.65
The net credit will be $2.95 per spread.
The debit when initiated yesterday was $1.95, resulting in a profit of $1.10 per spread.
This results in a one-day gain of 59.5%.
If you traded the suggested 6 lot, the cash return is $660.
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 a suggestion on a stock that recently reported.
The stock is Masco Corp. (MAS).
They reported on October 28th with a 26 cent beat.
I am going to suggest you trade the front month options, which expire on November 20th.
This suggestion assumes that MAS will follow through on the push it is making today.
Here is how you open the position:
Buy to Open November 20th - $55.00 Call for $2.25
Sell to Open November 20th - $60.00 Call for $.40
The net debit will be $1.85 per spread.
Based on the tracking portfolio, I suggest you limit the trade to a 6 lot or 1.1% of the portfolio.
The maximum gain on a six lot would be about $1,890 or 170%.
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