NEW YORK (TheStreet) -- Andrew Keene, of Keene on the Market, was with TheStreet's Lindsey Bell, discussing his new book on trading options.

Keene, who was a market maker in Chicago for 11 years, now trades on a computer away from the floor, just like most traders these days. His book is tailored to help individuals go from beginner to a one-man hedge fund, as he did.

He said that he essentially uses two strategies: unusual options activity and earnings plays. The second strategy is more obvious, where Keene uses an array of options -- such as calendar spreads, condors, call-and-put butterflies, etc. -- to pick his moves ahead of a company's earnings announcement.

The other strategy investigates whether options activity is unusual, typically based on of the size of the order.

For instance, when large orders flow into the market, Keene seeks to decipher which institution or big-money player is making them. He watches roughly 2,000 of these trades placed each day, and acts on about five.

He mentioned two of these recent trades, Mosaic ( MOS) and American Eagle Outfitters ( AEO), which have generated between 500% and 600% returns.

Although many tips can be found in his book, Keene on the Market, he said that traders could take the at-the-money call price and add it to the at-the-money put price for earnings plays. The combined price is the implied move that the market expects the stock to make after results are reported.

-- Written by Bret Kenwell in Petoskey, Mich.

Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter. Focuses on short-to-intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.

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