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.
Let's take profits on the Chubb Ltd. position, ahead of the July 4th holiday.
My suggestion today is this:
Sell to Close (1) November $125 call for $7.80
Buy to Close (1) November $135 call for $3.00
Based on the suggested 6 lot, the cash return will be $840 for four days.
On a percentage basis, the return will be 38%.