Komag and Cree: A Double Option Play

Fielding Reader Email

Enjoy your column! Could you go deeper in the money and go out longer to get a higher delta or does that require too much capital for the reward? Keep up the good work!

You can always go deeper in the money, but remember, the deeper you go the higher your exposure. I select DITM calls that go deep enough to provide downside protection, but not so deep that I overexpose myself.

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I've begun following your DITM call strategy, but I'm unclear on the significance of the "DITM next buy level" column on your scorecard. Please explain.

The "DITM next buy level" column is one of the most important features of the weekly Stat Book Scorecard. This column shows readers the point at which we should increase our positions in a DITM call.

When I make stock selections, I make them at a price and time I like. If that stock goes down in price, it becomes even cheaper and makes me like it even more. The next DITM buy levels represent the next opportunity to build positions and increase potential profits.