Dykstra: Burnt Peabody

This statement defines my approach to the stock market, and I read it every morning before I begin the trading day: Be fearful when others are greedy and greedy when others are fearful.

Those who have been following my deep-in-the-money calls have come to learn that the recent stock market volatility creates tremendous buying opportunities. Because we buy deep-in-the-money, the delta approaches 100%, which means for every point change in the underlying asset's price, there will be an equal and simultaneous change in the price of the option in the same direction.

So investing in the option is similar to investing in the underlying asset, except the deep-in-the-money call holder will have the benefits of a lower capital outlay, leverage and greater profit potential. This is also the reason we choose our expiration date four to six months out. ...