Either every options junkie is online or our readership is deeply committed to derivatives. Whatever, my mailbox is filled with people who want more options articles, so I am happy to oblige.

First, let me give you a little options philosophy. Do you know why there isn't much written in the conventional press about options? No journalist in his or her right mind ever chooses to write about them because every knuckleheaded night editor or copy editor they come up against always insists on jamming that obligatory seven-paragraph explanation that options are "the right but not the obligation to purchase or sell ... blah blah blah."

By the time you are through with the gobbledygook there is no room for the substance. I used to try sneak put and call references into my copy at


, but it never got through the sniffing dogs and the metal detectors on the edit desk.

And any time I was caught, fully 400 of my 1,200 words became the proverbial cancer warning on the side of the package.

So I would kill the article rather than have the flow interrupted by that unintelligible boilerplate.

Let me tell you how I use options. As common. A proxy for common stock. I started trading options out of my dorm room in 1981 when I didn't have enough money to buy stock in




, two favorites of mine at the time. I used options conservatively, buying calls to mirror common and preserving my cash for the crash that never came.

Sixteen years later I am still doing the same, particularly when I am investing in stocks with no dividends.

Let's say that tomorrow I feel I must own


. If I don't have a ton of capital, that's a sure end to diversification. Every penny would have to go to buy a few shares of a $138 stock, for almost every person in this country.

But let's look at the October $110 calls. Sure there is a heap of premium. Sure there are added commissions. But if you think Microsoft is headed substantially higher over the near term, you would be nuts not to consider the calls.

By purchasing this call for $44, you are buying a $44 stock that tracks Microsoft the way the Russians track the


space shuttle. In other words, you don't get


precision, but you still get the job done.

Of course, come October you will be faced with a difficult decision about what to do: roll into other months, exercise, sell. But if you were right about the direction, that question becomes moot. You'll have made a fortune.

That's your first lesson. I will be examining the differences between puts and calls -- the real-life differences -- in the next installment and will continue over time with index options.

James J. Cramer is manager of a hedge fund and co-chairman of


. His fund holds a long position in


. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Mr. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he welcomes your feedback, emailed to