Options Know-How: Financials, Potash

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

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

From Option Traders Look for Volatile January in Financials:

Long January volatility plays also showed up in the Financial Select Sector SPDR (XLF Quote), the basket of money-center banks, including Citigroup (C Quote), that also serves as a popular hedge vehicle against individual components. With shares in the ETF down 2.6% to $13.45 (within a buck of its 52-week low), it looks like a 5,800-lot straddle went through at the January $15 line, with the trader buying the call and put concomitantly for a total premium of $6.65. This position would imply the trader is looking for a recovery in the XLF either above $16.65 or a break below $3.35.

Bank of America (BAC Quote) shares are also trading 3.7% lower at $18.76, as options volume is skewed to calls by nearly 3:1. The most eye-catching trade today [Nov. 11] has been a 13,000-lot call spread in January...

Read the full version of Option Traders Look for Volatile January in Financials (RealMoney access required).

From Curious Call-Selling in MF Global as Stock Tanks:

Shares in online brokerage MF Global (MF Quote) dropped 8% to $2.55, and here the option activity -- three times the normal average -- paints a rather distressing picture. A large chunk of calls, some 4,000-lots worth, sold freshly to the bid at the December 2.50 strike for 50 cents apiece in a transaction that does not appear to have been tied to stock, according to our data sources.

With these contracts to buy MF Global a nickel in the money, a seller of these positions is likely looking to express an eminently bearish view, but doesn't feel a put is worth the cost outlay.

Read the full version of Curious Call-Selling in MF Global as Stock Tanks (RealMoney access required).

Jud Pyle (Mad About Options, ONN.tv):

In November, option volume has been running at an 80% pace to year-to-date action. Yesterday [Nov. 10], fewer than 10 million option contracts traded.

As we have already seen examples of, low volume can result in volatile market movement. The actions of one determined or forced seller can spur extreme price movement when volume is low.

Mad About Options: Potash Fertile (Video, Nov. 11)

Jud Pyle and Matt Buckley take a look back at Jim Cramer's comments about Potash (POT Quote) and how their related options trades performed versus the stock trades.

To watch the video, click the player below:

Plus, don't miss these recent options videos on TheStreet.com TV: Mad About Options: Dipping Into Wells (Nov. 11), Mad About Options: Who Cleaned Up With WMI? (Nov. 10) and Mad About Options: Hartford Skips a Beat (Nov. 10).

For more information about Mad About Options, visit www.ONN.tv.

For more on options, bookmark and visit TheStreet.com's Options/Futures page.