Wednesday, July 11, 2007

How can you not like OPTIONS? >>>> Leverage = POWER ....take advantage!!!

Leverage your money by using OPM (Other People's Money)
...not the movie with Danny DeVito...we're talking OPTIONS!

OPTION LEVERAGE turns small moves in the common stock into BIG PROFITS for the DIPfolio.


NYX option call > common stock up 10%

> BOTD option call up 50%


added to the DIPfolio at $8.90 ... that chart is just too sexy!!!


CLX option call > common stock up 2%
> BOTD option call up 15%+ *profits taken*

ACM option call > common stock up 15%
> BOTD option call up 290%+ *profits taken*

Our strategy is simple ... pick a stock you like, buy the option instead.

We look for options that are at-or-near-the-money, sometimes slightly in-the-money....for us it makes the math easier. Pick a stock you want on the DIP, check the options, look for one that has moved less (relative to the stock movement)...then BUY "the option" ON THE DIP!

BOTD also likes option "calls" where the current stock price is at, near, or close to the strike price....again keep the math simple...and keep the logic simple.

5 comments:

Anonymous said...

I notice you have access to charting for options, who from if I can ask? (even my broker doesn't offer them)

DIP MASTER said...

most charts we use are from etrade

-BOTD

Anonymous said...

I still dont understand options

can someone explain?

dKhang said...

same here... if i buy for example calls expire on Aug, do i have to sell it? say.. it's $7 now, and i buy $8, can i sell it any time and make money if it's above $7. can someone explain this option and how to play it to maximize profit? thanks.

Anonymous said...

Try this site out, great for beginner option playas....

http://www.tradefreedom.com/en/learnbettertrader/interonlinetut.asp#

Just click on the Introduction to Options Trading link at the bottom.