While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to the 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 one more suggestion today. And this will be the final one.
This one will be a debit spread. And it will be on FedEx Corp. (FDX).
The trade is a bearish trade. FDX is trading around $150.28 as I write this.
My suggestion is this ...
Buy to Open January 17th - $150 Put for $3.05
Sell to Open January 17th - $145 Put for $1.37
The net debit will be $1.68 per spread with a maximum gain of $3.32 per spread.
If FDX falls under $145 by January 17th, the return will be almost 200%.
Based on the nominal portfolio, limit the trade to 6 spreads or 1% of the portfolio.