Dykstra: Digging Into Readers' Questions

Lenny, It's great to see your column back on a regular basis. I've learned a great deal from you and have increased my trading profitability while reducing my risk by implementing your options strategy.

I truly value the way you focus on one strategy and explain it very clearly while providing actionable information. Your focus on this strategy and getting base hits rather than swinging for the fences all the time has been extremely helpful and reduced the stress of my trading. Thanks for sharing your strategy. It is greatly appreciated.

-- D.S.

I am very happy to hear that deep-in-the-money calls have been effective for you. Every investor should strive to minimize risk while increasing profitability, and it is great to hear that readers are gaining value from my column. As much as some players prefer the long ball, steady profits over a long period of time add up nicely.

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Mr. Dykstra, I am just now discovering your articles. I really enjoy them, but I have one question: Do you use advance orders when you enter a position?

The more I learn about options, the more I agree with using a limit order to buy and sell. But do you also use a stop-loss order to protect yourself from any downside? That is three orders, so would you need an advance order, like one cancels the other?

I am just now beginning to trade with real money and am finding out that how to place orders is an art. Thank you for your time.

-- J.A.

Thank you for your response. I believe strongly in placing limit orders when purchasing and selling options. This ensures that you can maximize your profit on both sides of the equation. This is especially important in a volatile market like the one we are seeing today.

Thank you for your question, and I hope this helps. Keep reading the column; I will feature updates on my picks, as well as a steady flow of new plays to make. Good luck with the trading.

Sadly, I lost my good friend John Vukovich this week. John was a very special guy. I confided in him, and he not only helped me as a Major League Baseball player -- he taught me about life!

Always remember: Life is journey. Enjoy the ride!

1 What would best describe your stance heading into the coming week of trading? Bullish Bearish Neutral 2 Which of these sectors do you think is set to move up in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities 3 Which of these sectors do you think is set to move down in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities View the results without voting