I am having a hard time understanding that if I own stock of XYZ how can I write puts to make money and how exactly does this compare to writing calls. I understand a little of the concept of writing calls.

I am really confused by the large number of different option quotes for a single stock. For example, according to the symbol rules, the Yahoo! (YHOO) option root should be YHQ. But in fact, there are so many different roots. What is the difference between them? Which one is the most active?

I found a stock trading at 22.50, and the February 20 call option is priced at 4.50. If I buy the stock and sell the call option, it would be a covered call with the call in the money. If I am exercised and have to sell the stock at 20, do I make a profit of 2.00? Assume I don't care if the stock is taken from me. Is this a valid strategy?

I see a lot of at-the-money put and call options being traded. For example, a stock is trading at 60 and the options most actively traded are for the June or July 60 strikes. What is the motive for this type of trade and what are the monetary goals a trader is most likely trying to achieve with this motive?

How or where do you find out whether your option contract is an "American style" or a "European style"? Your web page is great—keep up the good work! Thanks.

I've recently heard someone use the term "assign an option" and was wondering what they meant. Can you tell me what that means?

I bought ABC stock at $15, then simultaneously traded 2 LEAPS, long-term options that expire the year after next. I sold a call with a strike price of 20 and bought a put with a strike of 15. The money I received for the call paid for the put, so the options cost me nothing. At the end of two years, if the stock is $15 or below I lose nothing, yet the profit between $15 and $20 is all mine. Is this a sound strategy?

I have recently heard about QQQQ and SPY. Can you explain what these are and how they work?

Can you review margin requirements and how to calculate it for us?

I am trying to learn the different forms of spreads by paper trading. However, I thought of something that hit me like a truck. What happens if I am holding a bull spread and the option I sold gets called? What do I do then? Does that really happen in real-life trading? Thanks for a great website and keep up the excellent work.

Can you explain how to calculate the best credit spread strategy as far as choosing the strike prices for each leg?

What happens if you buy a deep-in-the-money LEAPS call, and you sell a short-term out-of-the money call against it? For example, stock XYZ is trading at 55, and I buy a January 2002 30 call for $22, and I sell an October 60 call for 5.50. What happens if on October expiration the stock is above 60 or below 30?

I have been writing covered calls and I'm now looking into bear credit spreads. I believe I understand the process of exercise and assignment covered in the standard text and in your Q&A's. However, I've never read how an assignment is performed when someone has an option spread. I am just assuming that brokerage firms will simultaneously exercise my long options to cover the assignment for my short options. At least I hope so. Can you please explain this?

If deep in-the-money puts change almost dollar for dollar with fluctuations in the stock price, then why not buy front-month puts on stocks whose ex-dividend date is rapidly approaching, given that the value of the stock will certainly drop upon payment of its dividend?

How do I compute the time value of LEAPS. I understand that the current risk-free interest rates have some bearing. Please explain. Formulas would be helpful.

In a 3-for-2 stock split, does the 100 strike become the 75 strike?

I'm a new to options trading, and I've started with a few paper trades. I sold the ABC August 52.50 put for 1.40 when the stock was trading at 57.63. The option price has dropped to 0.10 the day before expiration and will in all likelihood finish out of the money. How do I calculate my gain on the trade? What is the downside to selling options?

Why would an investor sell a put instead of buying a call and vice versa?

I've heard that instead of using a limit order, you can sell puts to acquire a stock at a specified price. Can you describe how to use options to do this?

I have been paper trading bull put credit spreads, and I do not know what action to take when the underlying stock price closes within the spread. Do you have any suggestions before I start doing actual trades?

I am looking for a more conservative method of investing in options. I have heard that put selling might be such a method. Can you provide more information about it?