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 we are getting a bit of a bounce in the market and I want to use this as an opportunity to put on a long position in Qualcomm, Inc. (QCOM).
I am going to suggest a debit spread and buy a few weeks of time.
My suggestion today is this:
Buy to Open December 7th - $55 call for $1.60
Sell to Open December 7th - $58 call for $.55
The net debit will be $1.05 per spread, with a maximum gain of $2 or a two to one return.
Because we are not buying a lot of time, I suggest you limit the trade size to 8 contracts or about .8% of the nominal portfolio.
