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) and offer an appropriate options strategy. Pyle and Buckley also offer options ideas for Yamana Gold ( AUY) and Jefferies ( JEF).

To watch the video, click the player below:

For more information about Mad About Options, visit www.ONN.tv.

From Slump in Railroad Stocks Raises Implied Volatility:

Yesterday's Oct. 1 move higher in volatility and put 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) 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 call 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- in-the-money 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 -- live on Saturday, Oct. 25, register now for TheStreet.com Investment Conference.)

For more on options, bookmark and visit TheStreet.com's Options/Futures section.

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

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