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.
With a shortened trading week this week, I suggest you book your profit on the ZEN trade.
My suggestion today is this:
Sell to Close (1) January $55 call @ $1.60
Sell to Close (2) January $50 Put @ $2.70
You will collect $700 per strangle. The initial debit was $550 per strangle.
The net will be $150 per strangle or $450 if you traded the suggested 3 lot.
This is a gain of 27% in 4 days.
Because I suggested the front-month options, I would prefer to close and put it on again if we get a chance.
