re you the sort of person who should be selling short, using margin, trading in options, or buying and selling futures?

If you aren't sure, the answer is probably no. But lumping these things together can be a bit misleading. For example, a type of option known as a covered call is a pretty conservative instrument, while at the other end of the spectrum, the futures market rates somewhere below Las Vegas as a safe place to invest. Selling short falls in between.

We'll try to help you figure out whether any of these relatively aggressive tactics are for you. Just remember that options, futures and the like are powerful but dangerous tools. Don't even think of using them without a full understanding of how they work. Better yet, do some play trading first before you use real money.

A margin account is simply a brokerage account in which you use borrowed money to buy stocks. Federal rules require that you put down at least 50 percent in cash as collateral. That means your $5,000 can buy $10,000 worth of stocks, since you borrow the balance from your broker.

Like so many things, margin can be both risky and rewarding.

Margin is for fairly sophisticated investors, especially those with accounts large enough to get favorable interest rates. It should only be used in a bull market, and for the purchase of stocks with strong prospects of appreciation (as opposed to stodgy dividend payers).

Selling short is a risky technique you can use in your margin account. It entails selling shares you don't actually own, but which you have borrowed from your broker. The hope is that they will fall in price. Then, when the time comes to replace the shares you have borrowed, you can purchase them in the marketplace for less than you paid. Voila! Profit.

Of course, it's not that simple. If the shares rise in price, you lose money. Theoretically, there's no limit to how high they can rise, so there's no limit to how much you can lose. And of course, there are commissions.

The tricks to short selling are, first, careful homework to identify stocks that are likely to fall. (Remember that stocks have a long-run tendency to rise, so pick carefully. Signs of fraud are especially nice.) The second key is putting in place a stop-loss order. This keeps things from getting out of hand.

Options are contracts giving the holder the right to buy or sell at a given price by a given date. For most investors, the main kind of option to consider is a covered call. Let's say you own 300 shares of IBM, which is trading at about $130. You might instruct your broker to sell someone the right to buy this from you within six months for $150. For this privilege, which comes in the form of three options (100 shares each), the buyer pays you a nonrefundable fee. If IBM never reaches $150 during the contract period, you've made the fee for doing nothing. Once the options have expired, you can do the whole thing all over again. You can even do it regularly, in effect supplementing IBM's dividend.

Of course, if IBM does reach $150, the option holder gets the stock. But you get $150 per share, and you still keep the option money, so the downside isn't terrible. You can always buy more IBM, although you might have to pay taxes on your gain, and there would be commissions as well. The fee paid to you for the options is also taxable as ordinary income.

Used carefully, covered calls can make sense for conservative investors, especially those who own stock that seems to be stuck in a trading range, or who have shares they feel lukewarm about and don't mind selling to an option holder.

Trading in futures is extremely risky. Although they have a variety of legitimate uses for large financial institutions and professional traders, and in the case of commodities, for farmers and businessmen, for the average person futures aren't investing. They're gambling. And for even a sophisticated lay investor, they are a poor gamble at that.

Basically, people who trade futures agree today on the price of something or other at some future date. Unlike options, which are simply the right to buy or sell something, futures are obligations. Yet hardly anyone ever takes delivery on the things underlying futures contracts. Instead, accounts typically are settled on a financial basis, which makes it awfully difficult to distinguish futures trading from what happens in your average Las Vegas sports book. (One big difference: your odds in betting on a major sporting event are pretty close to even, thanks to the "line." Your odds as an amateur trading futures are terrible.)

Financial futures, unlike commodities futures, are basically bets on interest rates. The most actively traded futures contracts in the world are Treasury bond futures, but you can also trade stock index options and stock index futures options. That's right, you can buy and sell options on futures contracts. Don't even ask.

One of the most important things about futures is leverage. Using futures, you can control large quantities of an underlying asset such as corn or Ginnie Maes with a small initial investment. Thus, relatively modest moves in price can result in large gains or losses, which means futures can be a way to get rich (or likelier, get poor) quick.