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Cramer's Options Trading Playbook

Tuesday, 8 Sep 2009 | 7:28 PM ET

The individual investor is back, says Cramer, who sees money pouring into the market from the pockets of the public, and the money is not just going into stocks. Cramer has seen a movement of regular investors into the options market - a subject that has been avoided on Mad Money because trading options is extremely complex and most people are better off not using options if they don't fully understand them.

Your Best Option?
Insight on the options market, with David Fisher, the CEO of optionsXpress and Mad Money host Jim Cramer.

But options are trading at larger and larger volumes, with 2.4 billion contracts crossing for the first 8 months of the year, up 2% from the same period in 2008. Cramer also cites a survey done by Schwab, which shows that 47% of its active, individual investors trade options regularly, up from 40% one year ago.

If you're going to trade options, it's Cramer's job to teach you, and if you trade options the right way, you've got a method that lets you take on less risk and still get big rewards.In other words, you can make a small amount of money go a long way. So, where do you start?

Cramer says the best place is with optionsXpress, the online broker that’s been a pioneer in helping retail investors trade options. At OXPS option trades made up more than 60% of the trades they executed in July, up from 56% in June and the highest percentage level since last September, says Cramer. This may be the best play on increased trading in options, especially if ordinary retail investors are jumping on the options bandwagon.

How big and how sustainable is this trend? Can it last? Is this the way of the future, and if so, is OXPS the pure play? Are all the options investors at home being cautious and careful, or are they betting the farm on instruments that could blow up in their face? To answer this question, Cramer is talking to David Fisher, the CEO of optionsXpress. For important tips, tricks, strategies, explanations and Cramer's full interview, check out the video!



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