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Dykstra's Deep-in-the-Money Call: Tesoro

Lenny Dykstra

Last night it was the Montreal Canadiensturn to keep their eyes glued to the tube. The Habs' had to wait through a tight Game 7 between the Philadelphia Flyers and Washington Capitals to determine their next opponent in the quest for the Stanley Cup.

The Flyers scored an overtime 3-2 victory over the Washington Capitals, who had trailed the best-of-seven series 3-1 but had clawed their way back into the fight to force a game 7. Joffrey Lupul buried a rebound at 6:06 into overtime to send the Flyers to the second round.

For readers of this column, the gratification isn't always as quick. While my picks sometimes score wins quickly, other picks take time to turn our way. The season's still young, but we've grabbed wins with Boeing(BA Quote - Cramer on BA - Stock Picks), Dow Chemical(DOW Quote - Cramer on DOW - Stock Picks), Sigma Designs(SIGM Quote - Cramer on SIGM - Stock Picks) and Garmin(GRMN Quote - Cramer on GRMN - Stock Picks) for a total of $4,000. Other positions remain open.

And for today's pick. I'm going with Tesoro(TSO Quote - Cramer on TSO - Stock Picks)

Tesoro produces refined products, including gasoline, jet and diesel fuels for sale to commercial customers. It also sells gas and diesel fuel through its retail segment.

The stock got absolutely slammed Tuesday, shedding 5.4% during regular-session trading. It closed at $26.82, slightly above its 52-week low of $25.06 a share and miles below its 52-week high of nearly $66. The stock is down 40.57% this year alone.

Refiners have been feeling the pain lately and are operating at their lowest levels since shortly after Hurricane Katrina in 2005 when natural disasters disrupted the industry. Part of my strategy is to find stocks that have been unfairly beat up by the Street and I think Tesoro fits that bill.

That's why I am going all the way out to January 2009 with this order for 10 contracts. I will place a limit order at $12.80 for the Tesoro DITM calls using the $15.00 (ZGCAC) strike price. Once the order is filled, make sure to place a sell order at $1.00 higher.

Always Remember: Life is a journey, enjoy the ride!