Stocks made a strong run-up leading into and through the much-anticipated rate cuts by the Federal Reserve Bank; however, yesterday was a different story altogether. The financial sector continues to suffer the negative backlash from the subprime crisis, and after a wave of losses, writedowns and CEO firings, the full extent of these problems has yet to surface.

As stocks continue to move with heavy volatility, option premiums get to be fairly high.

Archer Daniels Midland

(ADM) - Get Report

deep-in-the-money (DITM) options trade with a very favorable premium. I keep coming back to this stock, because it consistently brings DITM wins, without requiring us to overexpose our hard-earned money.

As many of my regular readers know by now, ADM is one of America's agricultural giants. The company grows, transports and markets a wide array of agricultural products. With the steady increase in the price of such commodities, ADM should enjoy better profit margins moving forward.

Additionally, the company provides investors with an excellent growth opportunity with its ethanol operations. The U.S. will continue to search and explore alternative energy uses, but one proven method already under way is to use ethanol. This sector once enjoyed solid gains on the market; however, investors seemed to have forgotten about the promise of ethanol as a source of energy.

Congress is intent on increasing ethanol usage in the U.S., and in doing so, it is guaranteeing an increase in ADM's profits. As a result, I will take advantage of this situation using DITM options. I will place a limit order for 10 March 30 calls (ADMCF) for $5.40 or better.

Once again, as we do every Friday, let's take a look at your emails.

Hi Lenny,Fabulous column you're providing. Thankyou for the training and for the updateon Hershey (HSY) - Get Report! Your Scorecard on Oct. 24 shows 20contracts of CCV with an averagepurchase price of $4.90. On Oct. 31,the Scorecard shows 20 contracts of CCVwith an average purchase price of $3.57. How did you do that? Maybe someHalloween trickin'?

No Halloween trickin' intended, just an error in the Stat Book, as several readers noticed. My assistant, who does a fabulous job keeping track and creating the Stat Book for me each week, is usually very meticulous and careful, but she happens to be human too, and she let this one get past her.

Neither of us likes publishing errors, but we are both thankful for reader attention in this regard. Please note that on Oct. 25, our

Citigroup

(C) - Get Report

stock reached a next buy level, and an additional 10 contracts were purchased, dropping our average to $4.13. With the next buy level being hit again yesterday, I now have 40 contracts at an average of $3.53.

Hi, Lenny, I'm a Philadelphian and one thatenjoyed watching you over the years.That grand slam in the rain in thathigh-scoring marathon playoff game wassimply unbelievable, because I just knewyou were going to come through. Anyway,am I reading your record right in thiscolumn? You only have one losingtransactions this year? If so, you maybe even better at this game than youwere at baseball. I must be reading itwrong, but knowing you ... well, you're awinner. Please let me know if that Bankof America (BAC) - Get Report transactions was your onlyloser this year. Thanks foreverything.

I am very proud of both my baseball success and my trading success. You are correct, the Bank of America trade has been the only trade this year to close without a win. Although I rolled the proceeds into the November calls and closed out the November $40s with a net gain for both transactions, it is published as a loss to help readers keep track of my trading transactions.

Happy Halloween! How about them RedSox? It's OK. I'm totally at peacewith the '86 Mets-Red Sox WorldSeries. I actually was hoping for a RedSox-Mets rematch, but it didn'thappen! Maybe next year?Anyway, I'm very impressed with youroptions strategy. I think I would liketo give it a try. However, one thingI'm confused about. If you'rementioning in your article to buy 10DITM calls to gain a profit of 1,000,why is there averaging and control ofmore than a thousand shares on some ofyour option plays? Do you tell yourreaders to buy more? My impression isthat you buy 10 contracts at the limitorder you stated, and from there youride it out until you reach your targetof 1,000. Am I wrong on this? Do youbuy more as time goes on if you'rerealizing that the target isn't beingreached?I think I'm missing something to yourstrategy. Any help would be greatlyappreciated.

My congratulations to the Red Sox and all their fans. When the stock moves up, we do as you suggest and ride it out until our target GTC is reached and we score a quick $1,000 win. However, when the stock moves against us, instead of selling for a loss, we add to the position. We do this because we trade on stock strength.

Each stock I recommend has the financial mojo to weather short-term setbacks in the market. Therefore, when the stock goes down, we don't run away and hide -- we buy more. Buying more when the prices are low puts us into a better position, because when the stock bounces back, we still only need a small bump in the stock price to lock in our win and go to the bank with additional profits.

Lenny, for your Friday questions I havea couple if you haven't answered themalready. What does the "OpenInterest" number mean referring toOptions? Does it enter into yourcriteria? And do you have a good bookrecommendation on options trading(before you write yours)?

Open interest refers to the number of outstanding contracts for an option series. The only bearing open interest should have for options traders is that with higher interest, trading is facilitated a bit faster than with lower interest. With my DITM calls strategy, I am usually trading deep in the territory where most options traders don't go, therefore the amount of open interest has had little or no bearing on my decisions.

As for good books on options trading, I have read

Options Made Easy

by Guy Cohen, and his book is easy to understand and provides readers with a sound foundation of options and the complex trading strategies that are used by most options experts.

I have just recently discovered yourcolumn and enjoy reading it very much.I have been investing in stocks forseveral years, but I am new to options.I am trying to learn as much as I can,and I would like to have a betterunderstanding of your DITM strategy. Isthere a posting of the details of yourstrategy somewhere on the TheStreet.com orelsewhere? If not, could you pleasedevote a future column to explainingthe nuts and bolts to us new fans?Thank you and keep up the good work.

You can access my

previous columns by clicking here.

The Street.com

archives all my columns so that readers can access them in the future. As for a quick lesson in my DITM calls strategy, here are the basics:

    Research the stock: I look for fundamentally strong companies with financials that back them up. We look for low price-to-earnings ratios in comparison with return on equity. We want to see little or no debt, with a debt ratio less than 1, or in special circumstances less than 1.5. Look for growth potential; a PEG ratio of 1 or lower points to this.

    Look for unfavorable market conditions: I look for good solid companies whose stock has taken a bath due to market conditions. Look for stocks with strong support levels and are trading at or near support, or at or near the 52-week low. Look for stocks that are listed as undervalued or oversold.

    Remember that the stock stats tell us what to buy, and the market tells us when to buy. All rules are guidelines, and each trade requires research and due diligence.

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

    TheStreet.com has a revenue-sharing relationship with Amazon.com under which it receives a portion of the revenue from Amazon purchases by customers directed there from TheStreet.com.

    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."