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.
I suggested going long on APA yesterday based on the fact that I anticipated a bounce in oil.
Quite frankly, it does not look like that is happening.
I am not going to suggest you close the position, instead I am going to recommend hedging the long position.
My suggestion is to Buy to Open the October $45 put at $2.75.
Use a one half hedge or a 3 lot if you followed the recommended 6 lot from yesterday.
The hedge should protect the long position if APA continues lower.
Also, should APA head lower, we can close the short calls at a profit and sell calls closer to the market.
