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 want to make a suggestion on Western Digital Corp (WDC).
Like many stocks recently, I do believe that WDC is bottoming out.
As I write this, WDC is trading around $38.55.
My suggestion is going be a debit spread.
Here is the set up:
Buy to Open February 15th $40 Call for $1.96
Sell to Open February 15th $45 Call for $0.60
These are the February monthly calls.
The net debit will be $1.36 per spread. The maximum return on this trade will be $3.64 per spread or 267%.
Because I am suggesting options just out of the money, I suggest limiting the trade to an 8 lo
