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 know it may appear that closing a long position on a day like today seems like the imprudent thing to do. But, with the short term trends still bearish, I am going to suggest you book your 3 day profit on FB.
If it does pullback, I would look to put it on again.
My suggestion today it this:
Sell to Close February $135 Call for $13.60
Buy to Close February $145 Call for $7.90
The net credit will be $5.80 per spread. The debit will you initiated the position was $4.70.
This will result in a profit of $1.10 per spread.
If you traded the suggested 4 lot size, the total cash return will be $440 or 23% for 3 days.
Of course, this alert only applies you initiated the buy 3 days ago.
