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.
I am going to suggest you come out of the short term debit spread we put on yesterday.
This is mainly because of the Fed announcement this afternoon, as opposed to the price action.
With these short term options, any profits evaporate quickly on any negative news.
Close the YUM debit spread.
Here is how you do it ...
Sell to Close September 27th - $112 Call for $2.60
Buy to Close September 27th - $115 Call for $0.85
The net credit will be $1.75 per spread. With a debit yesterday of $1.19, the net profit for one day will be 56 cents per spread or $280 if you traded the suggested 5 lot.
The one day return will be just under 50%.
