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 one more suggestion. And this will not be a covered call.
The trade structure I will suggest today is a debit spread.
And the stock is EA. EA reported already and after selling off, it rallied back strongly.
EA is trading around $95.24 as I write this.
My suggestion is to Buy to Open March 15th $95 call for $4.50.
And Sell to Open March 15th $100 call for $2.35.
The net debit will be $2.15 and the maximum gain will be $2.85.
Because I am suggesting short-dated options, I suggest you limit the position to 4 spreads or 0.8% of the portfolio.
