What are your thoughts about these different ways of accomplishing that:
- Simply buy shares now at current price.
- Set a limit order (question is how far below current price)
- Write puts and either collect a decent premium and roll or get assigned at a more favorable price
- Buy ITM calls (you often do that to take advantage of cheap uncallable leverage)

I think #2 and #3 are more suited to situations that there is no particular reason to think there is a good chance of a biggish upside some time soon, or you think it isn't really cheap. And I lean towards puts only when it's a ticker that I'm likely to do it repeatedlyl against the same ticker for years.

DG seems cheap enough to me that there is no lack of upside. Presumably there is a capitulation price we're going to hit soonish. It could and should bounce a lot from there, maybe accelerated by short covering. I have no idea whether that will happen, but it's absolutely plausible, so you don't want to be positioned in a way that doesn't do particularly well for you if it happens.

Consequently I favour (and have done) #1 and #4. Keep the upside.

I'm also considering a fifth alternative: a few out-of-the-money calls for entertainment value as lottery tickets. I speculate that if I could pick the right one, it could be a ten bagger.

Jim

Berkshire Hathaway FAQ

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