Dykstra: Tee Up BEA

I believe my strategy for investing in deep-in-the-money calls accomplishes two critical goals for investors: limiting risk, while regularly locking in gains. Jeff Miller at SeekingAlpha critiques this investment style as "very active" because I choose "to sell quickly when the stock makes a small gain." I take a different approach.

I'm flattered that he has taken notice of my trading strategy. We agree on many points, but I offer four points in response to his comments.

1. Options are very complicated, so for my column I prefer to keep it simple and lock in a set profit target.
2. I buy deep-in-the-money, high-delta options with time to capture the profit. I look for proper entry levels -- i.e., support levels -- and I prefer buying calls that expire in four to six months because there is less decay to the time premium.
3. It is my stock substitute to buying on margin, and I limit my loss to the option cost.
4. There are many ways to trade successfully. Time horizon and attention to risk are both critical factors, so I buy time and use options as a stock substitute and margin alternatives.

As a baseball player, I made a living on working the count in my favor and taking what the pitcher gave me. Swinging for the fences is a baseball strategy that has its rewards. However, the risk is substantially higher than working the count deep and taking a walk or a single. My investing philosophy is no different; I take what the market gives me. When I can lock in $1,000 gain, I do not hesitate to do so, because just as singles add up in baseball, $1,000 gains add up in investing.

Time to Talk Sports

Grapefruit League games have begun, providing Floridians with something to do for the next month other than playing tennis and golf. For many fans, the exhibition baseball season is a rite of spring. Fresh-faced young ballplayers, often experiencing a taste of the big leagues for the first time, get to interact with veterans and fans in a unique manner. Devoid of the pressure of the regular season, the relatively relaxed atmosphere allows for a purer appreciation of the game, and the configuration of the parks, with the stands so close to the fields, provides a dynamic that is not available during the regular season.

Fans and players can talk after games, and fans can take pictures and get autographs from their stars. Understandably, many fans come to Florida to interact with the stars, but they often find that talking to the first-timers is quite rewarding. In addition to the novelty of the interaction, young players are more apt to spend time with the fans than the veterans are. Ultimately, you recognize as a player that the exhibition season, on several levels, embodies a greater familial sense than the regular season. On a certain level, with the final scores rendered essentially irrelevant, exhibition baseball is all about enjoying a day at the park.