Options/Futures

Dykstra's Deep-in-the-Money Call: Valero

 

Part of the decline in the last week can be attributed to a drop in gross refining margin across the industry. However, this company has a return on equity of more than 20% and nearly 80% of its stock is held by institutions, which are generally considered buy-and-hold investors.

At today's price, Valero is an absolute steal.

That's why I am placing a limit order to buy 10 January $35 calls (VHBAG), paying $10.90 or better. I will place the GTC sell order $1 higher than the fill price so I can grab a $1,000 victory as soon as it comes. So, if your order is filled at $10.90, you should immediately place a good-till-cancel (GTC) order to sell at $11.90.

Always remember: Life is a journey, enjoy the ride!

>To order reprints of this article, click here: Reprints

At the time of publication, Dykstra had no positions in stocks mentioned.

Nicknamed 'Nails' for his tough style of play, Lenny is a former Major League Baseball player for the 1986 World Champions, New York Mets and the 1993 National League Champions, Philadelphia Phillies. A three time All-Star as a ballplayer, Lenny now serves as president for several privately held businesses in Southern California. He is the founder of The Players Club; it has been his desire to give back to the sport that gave him early successes in life by teaching athletes how to invest and protect their incomes. He currently manages his own portfolio and writes an investment strategy column for TheStreet.com, and is featured regularly on CNBC and other cable news shows. Lenny was selected as OverTime Magazine's 2006-2007 "Entrepreneur of the Year."

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