Dykstra: Best Buy Options Are a Better Buy

Massey remains fundamentally sound, but surplus coal supplies and market conditions have pummeled this stock. As a result, we have had this position open for three months. Next week, look for instructions to roll this trade out through the winter, which I believe will give the stock the extra time needed to make this trade profitable.

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Lenny,

I am now ready to move on the DITM strategy, and the Comcast(CMCSA Quote) calls are in a perfect price range that I could lose everything and not worry (much) about it.

But I need to know that when you say $4.80 or better, do you mean $4.80 or less, meaning a better price, or $4.80 or greater, meaning price movement?

Thanks, and keep the calls coming.

-- Neil

Dear Neil,

Like most things in life, the first trade is always the hardest. However, when you get ready to pull the trigger the first time, please remember that when purchasing an option using a limit order, you will pay up to your limit, but no more than that.

This means that with your example, you could get a better price than $4.80 if the options were trading for less at the time you placed your order.

When you sell an option with a limit order, once again it will work in your favor -- this time the selling price cannot be less than your limit, but if the options are trading for more at the time your order is filled, you could see yourself with a bit of extra cash in your wallet, which is always a nice surprise.