Right now you could sell a put option on Intel (INTC) and pocket a bunch of cash," says Karim Rahemtulla. The contributing editor to White Cap Research explains, "There's no time like a down market to enter 'potential' positions in high-quality stocks."

"Thing is, as volatility continues to ramp-up, options premiums increase right along with it. This means when you buy options, you'll pay more. And when you sell options, you'll get more.

Yahoo! (NASDAQ: YHOO) yesterday posted its lowest price in nearly five years. The stock moved to $17.75, down from a 52-week high of $34.08.

The Wall Street Journal pushed the idea that this was an options play. "Trading in Yahoo options leapt to four times the normal level as investors picked up 168,000 calls that allow them to buy the company's stock." In other words, some traders are willing to gamble that the shares will go up.

But, they won't go up. There is growing evidence that marketers prefer search internet ads to display advertising. Yahoo! sells a great deal of display inventory and is a distant second to Google (NASDAQ: GOOG) in search. Some of that may change as Yahoo! begins to use the Google system to create its search results.That may not offset the fact that Yahoo! probably has as much display advertising availability as any company in the world.

Because Yahoo! has shown it is unwilling to make major cost cuts, a flattening of its revenue growth would be a disaster for its investors. The firm's year-over-year sales improvement is already barely above 10%. What had been a growth stock three or four years ago has now become a buyout gamble. Investors still hang on to some hope that Microsoft (NASDAQ: MSFT) or a large media company will make an offer for the portal company.

That means that Yahoo! still carries a "takeover" premium, which begs the question of where the shares might trade at the end of the year, if there are no offers. Investors are gambling that there is a 30% chance that Yahoo! will be bought, if it is not, the stock heads toward $13.

Douglas A. McIntyre is an editor at 247wallst.com.

For many investors, the strategies I covered in parts one and two of this series are more than enough options for their liking. But for some readers, the really return-hungry readers, they want more strategies -- more ways to utilize these derivatives. Unfortunately for those readers (and fortunately for the first category), this is my last options strategy piece.

This strategy is easily the most complex of the three I've discussed, but it also has its uses. This strategy -- credit spreads -- allows investors to sell options that aren't "covered" or "cash secured," but the risk is still very limited if done correctly. To tell you the truth, this is the most speculative of any of the strategies discussed in the series.

Essentially, a credit spread is created by selling an option and simultaneously buying a cheaper, further from strike option. The more expensive, closer in-the-money option is sold to collect the premium while the further out-of-the-money option is bought in order to limit the risk of the position. For example, if you sell 25 call options and buy 30 call options, the maximum risk is $500 per contract vs. unlimited if there is no purchased option. This strategy is pretty versatile because you can use it with puts or calls.

Like the other two "strategy sessions," I'll do my best to teach through examples.