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.
Today I would like to make a suggestion on a stock we traded last year.
That stock is 3D Systems Corporation (DDD).
DDD does have weeklies, which is something I like. And the stock appears to have put in a bottom.
I am going to suggest a weekly covered call.
Buy DDD at the market, which is $14.60 as I write this.
Then Sell to Open (1) July 13th $15 call for every 100 shares you buy.
These are the calls that expire next week.
The July 13th-$15 call can be sold for $.25.
Limit the trade to a 400 share buy in based on the nominal portfolio.
This will limit the risk to just under 6% of the portfolio.
If the calls are assigned next Friday, the return will be 4.4% for a week.