July was a very good month for me -- my picks have been en fuego. In fact, it was my best month ever for my deep-in-the-money (DITM) option calls, which I have been making for a few years.

As a result, readers who followed my picks, featured exclusively in my newsletter Nails on the Number, should be sitting pretty right now. Readers get three exclusive picks each week and the newsletter is the only place to get them. You can

check it out here

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Some readers have asked how much money is necessary to execute my DITM strategy. There is no easy answer: There are a number of variables to consider and everyone's circumstances are different. But I can give a rough sense of what to expect.

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In a recent update in my newsletter, I told subscribers to buy January $20 calls (MQFAD) of

Microsoft

(MSFT) - Get Report

. I told readers to place their order paying $6.60 or better, so that means it required an initial investment of $6,600.

How did I reach that number? Well, in nearly every one of my columns I suggest placing an order for 10 contracts. Each contract essentially controls 100 shares of the common stock of the company. I seek to control 1,000 shares of the common stock at the start of every one of my picks.

Regarding Microsoft, I would consider this type of pick a layup. We had one initial outlay of cash and no rebuys. It stayed in play a short amount of time, and turned out well.

The same thing happened with

Best Buy

(BBY) - Get Report

. I suggested that readers purchase the January $30 (BBYAF) calls paying $10.90 or better. It stayed in play just four days and required me to allocate $10,900 to this trade. Again, this is one of the simple ones -- they are not all that easy.

So far this season, I've had 19 picks that stayed in play five days or less. But some of the picks can stay in play for a longer time and require a significant outlay of cash. And remember, that there are always risks involved -- nothing is ever a sure thing.

Some trades can be painful.

Let's take a look at

UnitedHealth

(UNH) - Get Report

. I picked this company all the way back in the beginning of June. I suggested placing a limit order at $5.50 or better for the January $30 (VUHAF) calls. So that means I initially invested $5,500 in this position. The option price was filled but went down ... and down ... and down some more. I averaged down a number of times.

When all was said and done, I had 60 contracts. The good part is that each time I average down, I lower my average entry price. Since I set my good-till-cancel (GTC) sell order $1 above my average entry price, the lower that average, the better positioned I am.

I had moved my average from $5.50 all the way down to $2.50, which is a good thing. However, I had to pay to do so. Instead of having just $5,500 committed to the position, I had to increase that amount to $15,000.

And, this pick took 60 days to turn my way. So while the entire $15,000 wasn't locked in the position the entire time, I did have money committed to this trade for 60 days. In the end, it turned out nicely.

Morgan Stanley

(MS) - Get Report

was another one that required a large outlay of cash and a lot of patience. My average price was $10.80 and I had 140 contracts when all was said and done. I rarely need to average down this many times -- but this required a large commitment on my part.

Remember, at the outset of every trade, I seek to make $1,000. Since I buy 10 contracts, that works out to roughly $100 per contract purchased. Sometimes I need to add to the position, but the scale remains the same: $100 per contract purchased.

So, in the end, the amount of cash required completely depends on how much you have available to invest. With my DITM calls strategy, you do not need to follow every trade. I make three picks a week. Not every order is filled and not every reader plays every pick.

For example, I picked

Boeing

(BA) - Get Report

on June 10. The purchase price was $25.90. Readers who followed this pick had to commit $25,900 initially for just 10 contracts. It was profitable in two days, but readers need to be prepared in the event the pick goes down.

If I had to average down, readers would have had to make another purchase of $20,000 plus. And sometimes picks require multiple rebuys, so its important to leave enough in reserve so you can manage the pick after the first buy if necessary.

And you don't even need to buy the same number of contracts as I do. You can buy more or you can buy less. If you buy five contracts, you will shoot for a $500 win each time. If you choose one contract, you will aim for $100 wins. If you go for 20 contracts, your potential win will be $2,000.

However, keep in mind that you may need to add to a position in order to average down and increase your chances of a win in the event the pick goes south. Then your outlay of cash will be more, but so will your wins ... or potential losses.

The percentage gain or loss (before commissions and fees) on your trades will be the same regardless of how many contracts you buy.

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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."