Some Daytraders Opt for Options

This is the third column in a series on how active traders are faring in these tough times -- and, more importantly, what's working for them. Be sure to read part one and part two.)

This week we'll take a closer look at one of the strategies many of you wrote in about: trading options in place of stocks.

Before we get into the finer points of that strategy, you should know that options can be risky and difficult to understand. In fact, they're especially risky if you don't understand them. So don't even think about trying the ideas outlined here until you've studied the free downloadable booklet Characteristics and Risks of Standardized Options. It's an excellent primer despite its boring name. Also, the educational materials available on the Chicago Board Options Exchange Web site are among the best you'll find online. ...