Options Know-How: Kohl's, Bank of America

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

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

From Retail's Best Back-to-School Options Play(Video, Aug. 7):

Steve Smith, Options Alerts: "I like Kohl's (KSS Quote) for back-to-school sales... You can buy the September $45 call at $2.50. What I would actually prefer, is to create a little bit of calendar spread... So you can sell the August $45 call $1.30, buy the September $45 call for $2.50... So you're only spending a net debit of $1.20 to buy those $45 calls that are only $1 out-of-the-money."

To watch the video, click the player below:

From Dykstra: My New Playing Field:

Off the [baseball] field, I had to learn the hard way -- by taking a hit in the wallet -- before I really got the motivation to learn the rules of my new playing field: the stock market. I gave my broker $2 million to invest for my retirement. The next thing I knew, most of that money was gone. I had just $400,000 left. I was angry and couldn't believe my money disappeared. So I took one year to learn as much as I could about the market and then went at it.

I often get questions about how I got started. So, I will take you through the first step in my process today. It's pretty simple. I establish a universe of stocks that I am interested in. Currently, I have somewhere around 100 companies that I look at.

Once the stock is on my list, I watch it every day. I try to find trends and see how the overall market and its sector impact the performance of the stock. I also try to see when the operators on Wall Street make a mistake and undervalue the stock.

Read the full article.