While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to 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.
I would like to make a suggestion on a new position. The stock is Leucadia National Corporation (LUK).
This will be a straight out call recommendation and I will suggest you buy the front month, which is the December contracts.
LUK is trading just under $18 as I write this and the December $18 calls are quoted at $.30 to $.40
Because I am suggestion the front month and they are just out of the money, I am going to recommend a .5% allocation.
For tracking purposes that will mean the investment is limited to $500.
Based on a $500 investment, you should be able to buy 14 contracts, assuming you get filled at $.35.
The trade is based on an oversold condition and if it does move in 2 days, I will suggest you close the trade.