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.
I am going to go back to the well and suggest another trade on KMI.
With a four day week next week, I would like to capture premium decay over the long weekend.
KMI is trading just under $15, at $14.82 as I write this.
The February $15 call is $.44 to $.48.
My suggestion is to buy KMI at the market and then Sell to Open (1) February 19th $15 call for every 100
shares you buy.
For the nominal portfolio, I will assume a 400 share buy in, or 6% of the portfolio.
Try to sell the calls for $.48 to start, you can always lower the bid.
Assuming the calls are filled at 48 cents and they are assigned, the return will be 4.5% for one week.