Dykstra: One-Upping the Competition

The move is clearly an attempt to win now and should be only the first major move in a handful of trades and pickups we see across the majors in the coming weeks as we near the trade deadline. All of these teams are trying to set the table for a victory later on down the line, which is essentially what we try to do with each and every one of my deep-in-the-money call picks.

As I said at the top of the column, every team should strive to be the absolute best it can be. But the reality is that they need only be slightly better than the next best team. The Mets-Phils game last night illustrates my point perfectly.

The same philosophy holds true for my option picks. It would be nearly impossible to pick options that skyrocket and turn in massive victories almost every time. That would be particularly hard when facing markets like the current one, which is full of pain. That's just a fact, and there is no way around it.

However, grabbing $1,000 victories by identifying companies that are undervalued and ready for a bounce is something that is both manageable and that makes sense. We don't need to find a stock that will increase 20%, 30%, or 50% in the long-term. We just need to find one that has found a bottom or will find a bottom soon and ride it on the bounce.

For picks where we are off with our timing a little bit, we can still capture a victory even if the price falls. All we have to do is average down, which is essentially adding more contracts at a lower price to lower our average entry price and making our sale target lower. If you need proof, take a look at the win I had with Tesoro (TSO Quote) earlier in the year. We averaged down a few times for a $4,800 win. In the end, this company didn't dominate. In fact, at the time we unloaded our contracts, the common stock price was lower than it was at the time of our first buy. Right there is the power of my system.

Remember: Life is a game, enjoy the ride!

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