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 suggest that you sell another round of calls on THC. This is also because THC reports earnings on Monday, after the close.
Because of the earnings, the front week options carry an implied volatility over 100%.
My suggestion today is to Sell to Open (1) November 10th-$14.50 call for every 100 shares you own.
The November 10th-$14.50 call is quoted at $.75 to $.95 with the last sale at $.85.
You should be able to sell them for $.85. These are the calls that expire next Friday.
Only sell one call for every 100 shares you own.
If these calls are assigned next week, you would lose 13 per share on the sale, however, by selling these calls for 85 cents, you will have collected $1.25 in call premium. And it hedges the position down to $13.40 per share.
