Deep in the money call options cramer

You are using an out of date browser. It may not display this or other websites correctly. You should upgrade or use an alternative browser. Discussion in ' Stock picks and trading strategies ' started by RedStripe , Oct 25, Log in or Sign up. Getting Back to Even Jim Cramer's Advanced option strategy Discussion in ' Stock picks and trading strategies ' started by RedStripe , Oct 25, So was breezing through Cramers new book "Getting Back to Even" and he discussed an option stretegy that i was unfamiliar with.

He suggested buying an "in the money call" on a stock and riding it up and then in a different account selling the underlying stock short, after you have lock in profits as opposed to selling the stock. An example of this would be now you buy the C JAN 5 Calls.

I like those calls so ill bet that they are worth. Account 2 and you still hold the call in account 1 and you basically just get evened out by the losses on one account and gains on the other and it doesnt matter which direction the stock goes in except if the call goes out of the money and the stock goes lower and lower you make more and more money and have your profits locked in from the short sale.

Then you cover your short and take profits or enjoy the appreciate from your call and exercise it or just cover the short, and sell the call.

What do you guys think of this strategy? Has anyone ever used it? Might be a great strategy to use with a stock like AAPL here where people are saying its overbought yet price targets are being raised all ove the street.

RedStripe , Oct 25, October 26, In addition, some investors might get a little jumpy. Perhaps this is simply a programmed response as Mr. Cramer has billed himself as a bit of a Wildman who is prone to running around the studio and will do just about anything in front of a camera.

After all, before he started ranting and raving on T.

Cramer's performance has declined a fair amount. We were early readers of TheStreet.

New To Options? Consider The Deep In The Money Strategy - Alcoa, Inc. (NYSE:AA) | Seeking Alpha

Maybe it is for nostalgic reasons or maybe there is the hope that Cramer returns to the form he displayed back in the early days. If you will recall, Mr. James Cramer was just a wee bit critical of mutual fund managers during the Tech Bubble Bear market. He would publically rant and rave about the sheer stupidity of anyone who refused to sell stocks during a bear market. And in short, he called out the mutual fund industry for what it is — a bunch of closet indexers.

But that was then. Now, Jim Cramer is one of those guys who also doesn't sell stocks — even during the worst bear market in a generation.

Imagine what he would have said about that a few years ago. Because he never took any defensive measures, which in our book is simply unforgivable, during the Credit Crisis Bear, his portfolio got hit last year — and hit hard.

Since we also live in a glass house and invest for all to see, we are not prone to throwing stones. But in light of the fact that Mr. Cramer is on T. So, apparently his views carry a fair amount of weight with the public. And it is for this reason that one of our subscribers sent us a list of Cramer's 12 picks for the economic recovery.

Thus, without further ado, we'll present the 12 stocks that Mr. Cramer likes for the economic rebound. MMM Emerson Electric NYSE: EMR PPG Industries NYSE: COP Union Pacific NYSE: UNP BHP Billiton NYSE: HP Home Depot NYSE: HD VF Corp NYSE: VFC JP Morgan Chase NYSE: RedStripe , Oct 26, RedStripe , Nov 1, Florida , Nov 1, Mastajab , Nov 1, Regardless of the number of contracts or the strike price of the call.

I just want to know if you guys like the strategy sorry if it wasnt presented perfectly. This is not really an "advanced" option strategy from how you described it in my opinion. It's a protection option play. Buying in the money calls of a stock you sell short at the same time minimizes risk if your short play goes the wrong way. If the short goes your way you're out the money of the calls but collect the gains of your short.

If it goes against you and the stock price rises you cover the short then exercise the call option and sell the stock or continue riding it up.

You're buying insurance with calls and the cost of that insurance is the cost of the call. This option play or the opposite of buying puts equal to a long position is often used around potential directional changing upcoming events. Before trading options I would highly recommend reading all of the training material at http: I had the opportunity recently to talk with the head of their training department while he was in Atlanta and it was very enlightening and led me to their training material.

All of their training material is free and covers pretty much everything you'll find in any "options training course.

seboxinero.web.fc2.com: Customer Reviews: Jim Cramer's Getting Back to Even

I would highly suggest using their free training material for discovering option strategies as opposed to trying to understand Cramer's. Free trades are great!

I am not a professional investor and am mostly self taught. All views and opinions are mine and should not be taken as professional investment advice.

Always do your own due diligence when trading or investing. I disagree - you are not buying protection -as you don't own the stock. You are locking a gain and then betting on a widening of the gap between the actual stock and the price of the option while it drops below the target price.

Question I have - Why do you need a second account? StayFocused , Aug 15, Just wondering why you need a 2nd account. He touched on this a little on one of his recent shows, but im still confused. He talked about the different types of accounts, but he lost me.

I think it was the Fri Aug 13th show. You must log in or sign up to reply here. How to Execute a Winning Option Spread Position Eagle Daily Investor , Mar 22, , in forum: Trading news and analysis syndicated content.

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