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 am going to suggest a trade on a stock we traded before.
That stock is Owens Illinois, Inc. (OI).
I am going to suggest a trade structure like we traded before. And that
is a debit spread. This will limit the risk going into the trade.
As such, here is my suggestion.
Buy to Open February $19 call for $1.70
Sell to Open February $22 call for $.55
The net debit will be $1.15 per spread.
My suggestion based on the tracking portfolio is to limit the trade
size to a 10 lot, which would limit the risk to about 1% of the portfolio.
The maximum gain based on a 10 lot will be $1.85 per spread.