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 See Smoother Seas for Carnival Cruises

:

Carnival Cruise Lines

(CCL) - Get Report

has hitherto remained fairly upbeat about its earnings capacity, even in the increasingly obvious recessionary environment, arguing that cash-strapped Americans are likely to fly less and opt for closer-to-home cruises -- certainly a tantalizing prospect if the cruise in question is an all-inclusive one. And maybe the cruiseliner will be able to leverage this preference with a protracted decline in fuel prices.

Option traders today

Oct. 28 appear to be siding with this view, expressing it in number of unusual trades. In one 6,000-lot position, a trader appeared to sell the November 22.50/27.50

put

spread, taking a $2.65 credit and betting on Carnival shares recovering above the $27.50 level by Nov. 21. Furthermore, with the price of the November 32.50

call

hitting a 52-week low today, we observed option traders buying into that weakness in a 3,000-lot position.

Read the full version of

Option Traders See Smoother Seas for Carnival Cruises

(

RealMoney

access required).

From

Retailers Show Late-Day Surge in Implied Volatility

Today's

Oct. 27 announcement that Standard & Poor's had put the heavily debt-laden women's clothier

Liz Claiborne

(LIZ)

on CreditWatch with negative implications sent shares another 7.6% lower today to $6.42 -- nearly $10 below that company's

book value

. Options traded at more than 13 times the normal level, as the higher risk premium to LIZ shares sent implied volatility in the company's options some 22% higher this afternoon.

While the company is due to report third-quarter earnings on Nov. 11, still coinciding with the front-month options contract, what we've observed in the options market today is that traders are forgoing the November contract and entering fresh positions instead in December and January options.

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Here the activity appears roundly pessimistic, with what looks like short call-spread positions in the December contract between

strikes

7.50 and 12.50, and put-buying at the January 7.50 line. Both of these strategies suggest a very rough road ahead for Liz Claiborne shares, which these option traders believe will be scarcely able to achieve a meaningful recovery from current depressed levels even into the first of the year.

Read the full version of

Retailers Show Late-Day Surge in Implied Volatility

(

RealMoney

access required).

Mad About Options: J&J in Review (Video, Oct. 28)

Jud Pyle and Matt Buckley take a look back at Jim Cramer's comments about

Johnson & Johnson

(JNJ) - Get Report

and review how their related options trades performed.

To watch the video, click the player below:

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Plus, don't miss these other recent options videos on

TheStreet.com TV

:

Mad About Options: Western Digital Clocked

(Oct. 28),

Mad About Options: Exxon Pumped

(Oct. 27) and

Mad About Options: Qualcomm Quality

(Oct. 27).

For more information about Mad About Options, visit

www.ONN.tv

.

For more on options, bookmark and visit

TheStreet.com's

Options/Futures page

.

This article was written by a staff member of TheStreet.com.