Dykstra: Strike Up the BigBand Options

Today is Wednesday, which means it is once again time for me to let it all hang out. As I promised when I began writing daily, I will share the real score with you in my Stat Book, every week, good or bad. As you'll see below, this was another solid week for my deep-in-the-money (DITM) calls strategy.

When Microsoft(MSFT Quote) reported blowout earnings on Thursday, I scored a $1,700 win on those 10 contracts. The DITM strategy I implement requires placing a good-till-canceled sell order upon purchasing the options for $1 above my purchase price. Although that sell order is set to deliver $1,000 gains with the DITM calls, when the market gives more than that we will gladly take it.

After implementing a dollar-cost averaging strategy with the General Electric(GE Quote) position last Tuesday, that position closed Thursday for a $2,000 win. This shows the power of dollar-cost averaging, as it lowered the average purchase price and sell price for GE and doubled the profit.

Now let's get to the next new pick. Though signs indicate that the broad bull market may slow down, that does not mean that smaller bull markets do not exist. One smaller bull market is the communications and networking sector, and it includes today's stock pick, BigBand Networks(BBND Quote), which closed at $19.57 Tuesday.

BigBand services enable cable operators and telephone companies to offer video, voice and data services across a variety of networks. Its clients include Comcast(CMCSA Quote), Time Warner Cable(TWC Quote) and Verizon(VZ Quote).