IF YOU LIKE MONEY… THEN YOU ARE IN THE RIGHT PLACE!
People ask me all the time, “How do you know what stocks to pick?” The answer to that question can be very simple or very difficult. Here at Nails, we try and keep it simple and pick companies with good, solid fundamentals. We also look for solid historical and expected returns, good cash flow, and low debt levels (this statement is my favorite). We also watch for the operators on Wall Street to make a mistake and undervalue stock.
A stock becomes a pick based on 3 or 4 core items, such as; its technical trends – its moving averages. I watch these to see what direction it’s headed. I also watch market trends for news that will impact that stock’s industry and its performance. These are the strategies that enable me to pick good stocks that will turn hot at some point, enabling me to cash out. In the end, they pay off. And in some weeks, those payoffs hit the ball out of the park!
WELCOME TO NAILS INVESTMENTS!
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603 and 1 USING MY DEEP IN THE MONEY CALLS
Here is a quick overview regarding my deep-in-the-money options call strategy. Understanding the strategy is the key to learning how to follow my system.
First, let’s define the basic terms: What is a Deep-in-the Money Call? A call is defined as an option contract that gives the holder the right to buy the underlying security at a specific price, on or before a certain date. It is considered “in the money” when the strike price is less than the current trading price of the underlying security.
As the strike price declines, the difference between the strike price and stock price grows and the deeper in-the- money the call option is considered.
Trading DITM calls is a “stock replacement” strategy for me, it is not a buy and hold strategy.
Now to the rules. I target companies that have been unfairly beaten down by Wall Street. I then usually buy 10 DITM calls with a limit order. Trading DITM calls gives me access to the world’s best companies at a fraction of the cost if I were to purchase the underlying common stock. Ten contracts lets me control 1,000 shares of the company’s stock.