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 suggestion on WDC. I believe it is down to a key support level and it should get a bounce.
I am going to suggest a short term front week spread. The idea is that if the trade works, the return will be about 150% for four days, while risking a very nominal amount of the portfolio.
Here is the idea:
Buy to Open July 19th - $52.50 call @ $1.34
Sell to Open July 19th - $55.00 call @ $0.34
The net debit will be around $1 per spread. The maximum value of the spread will be $1.50 per spread.
Based on the nominal portfolio, I suggest you limit this trade to a 5 lot or 0.5% of the portfolio.