Options Know-How: Industrial Stocks

How much do you know about options trading? Here's a roundup of insights and ideas from TheStreet.com.
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How much do you know about playing the stock market with options?

The following are highlighted options insights and ideas from




Mad About Options: Steer Clear of Steel

(Video, Oct. 3):

Jud Pyle and Matt Buckley review Jim Cramer's recent bearish comments about

U.S. Steel

(X) - Get Report

and offer an appropriate options strategy. Pyle and Buckley also offer options ideas for

Yamana Gold

(AUY) - Get Report



(JEF) - Get Report


To watch the video, click the player below:

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For more information about

Mad About Options

, visit




Slump in Railroad Stocks Raises Implied Volatility



Oct. 1 move higher in volatility and


volumes in a bevy of diversified industrial stocks -- despite a relatively flat finish for stocks -- continued apace today, with traders seeking defensive positions in transportation names. Adding urgency to the options positioning today is the biggest intraday drop in the value of the S&P Railroad Index in two decades, sending implied volatility in the options of most railroad stocks hurtling toward 52-week highs.

According to live market data from Interactive Brokers, implied volatility in

Norfolk Southern

(NSC) - Get Report

rose nearly 28% on the session to read 71.7% -- handily a 52-week high and fully a 45% premium to the historic reading on the stock. With shares down 12.6% to $56.84, front-month


premiums are down more than 60%, with what appears to be buying interest in October 65 calls and selling in 55 puts.

Read the full version of

Slump in Railroad Stocks Raises Implied Volatility



access required).


Dykstra: Playing by the Rules


First, my strategy calls for buying deep-


calls. I

Lenny Dykstra usually pay a premium of $1 or less to purchase these options contracts. Sometimes it's a little over a dollar, but it doesn't happen all that often. That's a main part of my system and it's part of my ground rules.

I figure out the basic premium by adding together the

strike price

of the option I am purchasing plus the amount I am going to pay to purchase each contract. From that total, I subtract the price the stock closed at the previous day. When that calculation is done, I should have a premium of less than $1.

Read the full version of

Dykstra: Playing by the Rules


(To learn more about Dykstra's deep-in-the-money calls -- from Dykstra himself --


on Saturday, Oct. 25, register now for

TheStreet.com Investment Conference


For more on options, bookmark and visit


Options/Futures section


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