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.
You most likely will have your FEYE shares assigned this afternoon. FEYE is almost $1 above the strike price I suggested you sell.
I would like to make a suggestion today on another weekly covered call to replace FEYE.
That stock is Transocean, Inc. (RIG)
RIG is trading around $8.81 as I write this.
Buy RIG at the market.
Then Sell to Open (1) February 15th - $9 call for every 100 shares you buy.
The February 15th - $9 calls can be sold for $0.26.
If the calls are assigned in two weeks, the return will be 5.1%.
These are the calls that expire in two weeks.
Based on the nominal portfolio of $100,000, I suggest you limit this trade to 500 shares or 4.4% of the portfolio.
