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.
Today, I would like to make a short term covered call suggestion on a stock that looks to be bottoming.
That stock is US Steel Group, Inc. (X).
X is trading around $11.33 as I write this. And my suggestion is to buy X at the market.
Then Sell to Open (1) January 10th - $11.50 call for every 100 share you buy.
You should be able to sell the January 10th - $11.50 call for $0.35.
Based on the nominal portfolio, I suggest you limit the trade to 500 shares or 5.6% of the portfolio.
The return will be about 4.6% if the calls are assigned in two weeks.