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 would like to make one more suggestion. And this is also on a stock we traded before.
That stock is Celgene Corp (CELG).
CELG is trading around $75.50 as I write this. Like most stocks recently, it is oversold.
Unlike the earlier trade today, I would like to buy a little more time to see if CELG moves.
My suggestion is a debit spread.
Here is the idea ...
Buy to Open January $75 call for $3.60
Sell to Open January $80 call for $1.90
The net debit is $1.70 for a maximum gain of $3.30.
My suggestion is to limit the trade to a 6 lot or 1% of the nominal portfolio.