Deep-in-the-money calls are the perfect investing tool for a volatile stock market. For those of you who have been using my deep-in-the-money calls strategy, you know I prefer to go out four to six months with our strike price. Because of the time we give our picks to make a move up, our chances of executing a winning trade are improved tremendously, thereby improving the risk/reward profile.

This week, we focus on General Dynamics' ( GD) November $55 deep-in-the-money calls, which I'm looking to buy for $11.50 or better.

For the simple reason that this particular option hasn't traded in a while, I am only going to add a small "premium" to the stock price. General Dynamics closed Friday at $66.12; let's see if it comes in.

There is no reason to chase anything in this roller-coaster of a market. Until things calm down, we need to find companies that will alleviate the daily pain we have been experiencing with these massive market swings. This market is so volatile right now, it's downright scary! That is why we are going to buy the General Dynamics deep-in-the-money calls.

When market conditions are this unpredictable, a company needs to have a weapon to keep the "operators" from taking their stock down. Otherwise, it will get pummeled in an environment like this. In other words, we need to find companies that are buying back their stock. General Dynamics plans to buy back up to 10 million shares, or 2.5% of its outstanding stock.

Also, let me add that General Dynamics is arguably the premier defense contractor in the world. Bank of America recently boosted its profit estimates and raised its price target to $73. This is a company that has about 72,000 employees; it produced about $22 billion in revenue in the past 12 months. General Dynamics has a forward P/E of 14.31, return on equity of 18.87%, and to top it off, it has $1.70 billion in free cash flow. Remember, that's after it pays all its bills. This is the definition of a "major league" company!

The Game of Life

Speaking of the big leagues, certain sporting events are intricately linked with certain holidays. The Sunday of Memorial Day weekend is synonymous with the Indianapolis 500. Fourth of July weekend is synonymous with breakfast at Wimbledon. Labor Day weekend is synonymous with tennis' U.S. Open at Flushing Meadows. And so it is that Father's Day is synonymous with the U.S. Open Golf Championship.

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