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.
Today, I am going to make a suggestion on a stock I recommended earlier in the year.
That stock is Teva Pharmaceuticals Industries LTD. (TEVA).
Like a whole host of stocks at the moment, TEVA traded under its lower band on its daily chart and today is recapturing that level.
TEVA does have weekly options which is a nice feature.
My suggestion today is to buy TEVA at the market which is $15.30.
Then Sell to Open (1) January 4th - $15.50 call for every 100 share you buy.
You should be able to sell them for $0.45. These are the calls that expire next Friday.
If the calls are assigned, the return will be 4.24% for a week and one half.
I suggest you limit the purchase to 400 shares or 6.1% of the nominal
portfolio.