While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to the 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, I would like to make a suggestion on a stock that does have weekly options, but I am not going to suggest short term options at this time.
I am going to suggest you go out to the November monthly option expiration, which is November 15th.
The trade I am going to suggest is on DaVita Inc. (DVA).
The structure will be an uneven strangle with a bearish bias.
Here is the trade ...
Buy to open (3) November 15th - $57.70 call for $1.80
Buy to open (6) November 15th - $55.00 put for $1.95
Based on the position size I'm suggesting, the overall risk is 1.7% of the tracking portfolio.
They do report on the 7th of November, and I would look to close this trade out ahead of earnings
