Dykstra: Deep-in-the-Money Calls 101

When I played ball, I tried to find an opening, a weakness, in my opponent and take advantage of it. That's the goal of any ballplayer worth his salt.

When you boil it down, my outlook on investing is pretty much the same. I try to find good companies that the market has valued incorrectly and take advantage of this discrepancy.

I've developed a successful and straightforward strategy that isn't overused in the marketplace: deep-in-the-money options calls. I've been writing my columns for TheStreet.com for a few years now, and the number one question I get from readers is about my approach. So, in today's column, I am going to walk you through my approach because it's just as important to understand the reasoning behind my picks as it is to understand the picks themselves.

Using deep-in-the-money calls allows you exposure to the best companies in the world at a fraction of the price of the common stock. Readers of my columns will know that when it comes to options, I will not be recommending anything but in-the-money calls.

Mad About Options: Dow Chemical

If more investors did their homework, they would realize deep in-the-money calls are one of the few tools that can help you, the retail investor, find an edge. However, options can be very volatile, so if you want to be a winning trader, you need to stay on top of your open positions.

Through my subscription newsletter, Nails on the Numbers, I will do my best to help put you in position to ring the register over and over again. (Click here to sign up for a free trial or a subscription.)