Options Know-How: Industrial Stocks
How much do you know about playing the stock market with options?
The following are highlighted options insights and ideas from
TheStreet.com
.
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
and
Jefferies
(JEF) - Get Report
.
To watch the video, click the player below:
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For more information about
Mad About Options
, visit
.
From
Slump in Railroad Stocks Raises Implied Volatility
:
Yesterday's
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
(
RealMoney
access required).
From
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
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
.
(To learn more about Dykstra's deep-in-the-money calls -- from Dykstra himself --
live
on Saturday, Oct. 25, register now for
TheStreet.com Investment Conference
.)
For more on options, bookmark and visit
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.
This article was written by a staff member of TheStreet.com.
