syntax - "I want to understand what my options are" or "I want to understand what are my options"?

Which way is correct: "I want to understand what my options are" or "I want to understand what are my options" and why ?

Since my English still needs tons of work, this baffled me for a long time, and each time I did a quick search, but I could not find the answer. Thus, I decided to ask it here.

Answer

I used to make (and still occasionaly make) mistakes in sentences of this sort.

The correct sentence is

I want to understand what my options are.

There's a nicely-named linguistic term: the penthouse principle.

Quoting Wikipedia,

The penthouse principle: The rules are different if you live in the penthouse. (the "penthouse" here is a clause attached to the matrix clause)

The correct word order for a question:

What are my options? (the positions of the auxiliary verb are and the subject options are inverted)

But when you put this clause in a "penthouse", atop a main clause, you do not invert the positions of the subject and the auxiliary verb:

I want to understand [what my options are]. (the positions are not inverted: the subject options comes first, then the auxiliary are)

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Note that AdamV, being a native English speaker, says that

I want to understand what are my options. (incorrect)

feels like "two sentences clumped together". That's because we have subject-auxiliary inversion in "what are my options", and this is proper only when this clause is a main clause, not when it is a subordinate clause, a "penthouse atop a skyscraper".

Naturally, a native speaker would feel that "what are my options" should be a standalone clause.