Options Know-How: Apache, Parker-Hannifin

How much do you know about playing the stock market with options?

The following are highlighted options insights and ideas from TheStreet.com.

Mad About Options: Natural Gas in Solid State (Video)

Jud Pyle and Matt Buckley review Jim Cramer's recent bullish comments about Apache Corp. (APA Quote - Cramer on APA - Stock Picks) and offer options strategies for traders and investors. The Mad About Options crew also breaks down options ideas for Qwest Communications (Q Quote - Cramer on Q - Stock Picks) and Transocean (RIG Quote - Cramer on RIG - Stock Picks).

Pyle: "What I think investors can look at here to play this bullish sentiment, is the October 100-125 call spread. Investors, to do this trade, they would buy the [Apache] October 100 call for $18. They would sell the October 125 call for $6.60, so the outlay there is $11.40. Now the most that that call spread could be worth if the stock goes through 125... is $25. So your max gain there is 13.60... As long as the stock is 111.40 or higher, that's where the breakevens are."

To watch the video, click the player below:

From Options Mailbag: Not All Merger Strategies Are Created Equal:

With the recent spate of merger activity, readers have been asking whether options can be used to profit from the price spreads between the bid and the current price.

An example is the announcement that Dow Chemical (DOW Quote - Cramer on DOW - Stock Picks) will paying $78 share, or $15 billion in cash, for Rohm and Hass (ROH Quote - Cramer on ROH - Stock Picks). One reader asked the following question.

So ROH gets a market top bid and goes up like crazy. Now, what would be wrong with buying ROH stock after the pop and selling 10 covered calls for July?

There is nothing to be gained by trying to establish a covered call, or almost any other option position.

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