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To find out which trading strategies are best, we talked with several industry experts. These gentlemen are in charge of brokerage
firms designed for everyone from expert traders to those just getting into the options game. Industry luminaries Tom Sosnoff
of , George Ruhana
of , Wade Cooperman of , Don
Montanaro of and Stephen Ehrlich of ,
all gave us their thoughts on what options trading strategies best suit the beginning trader.

Let’s find out what kind of advice these “big brains” of the options industry have to offer.

Next: Strategy is a Function of the ÃÛÌÒ´«Ã½ You’re In

Strategy is a Function of the ÃÛÌÒ´«Ã½ You’re In

Tom Sosnoff of says the question of which strategy
is right for both neophyte and experienced options traders alike really depends on a number of factors, including the kind of market
you are trading in, and your personal goals.

“Strategy is a function of where the market is … For example, during market declines, volatility expands. When volatility
expands and prices go lower, something like covered
calls are a great strategy. When volatility contracts and prices are higher, I don’t like that strategy. So it’s just a function
of where we are in the marketplace.

“We [thinkorswim] teach customers all different types of things. For example, if you think we’re at the high end of the [trading]
range, we teach customers about selling upside credit
spreads. If we think we’re in a range-bound market, we’ll talk about butterflies
and iron condors.”

Next: Start With What You Know

Start With What You Know

When it comes to strategies designed specifically for new options traders, George Ruhana of thinks
that the easiest concepts to understand are the ones centered on stocks.

George explained that investors are saying, “Wow, if I buy this call, I don’t have to put up as much money and I can control
the shares, and if the stock goes up, my rate of return will also. If I buy the stock for $50 and it goes to $55, I make 10%. But
if I buy these calls for $2 and they go to $5, I make a 150% return. So it’s [about] getting comfortable by doing things you already
understand.”

George went on to add that for the newbie, collecting premiums by writing calls on existing positions (covered calls) is a good
way to, in effect, add a dividend to your portfolio.

Learn why covered calls are the only certain
way to generate income.

Next: Paper Trade First

Paper Trade First

Wade Cooperman of tells us that, “The best strategy for a new option
trader is practice.”

He suggests that those new to options trading open
an account and then take advantage of paper
trading. This, says Wade, allows the trader to “practice without actually committing large amounts of your personal money.” He
went on to tell us that understanding the impacts of what it is that you’re doing, and getting the trading experience without the
financial commitment is a great way to get started.

Wade added that, “When you begin to make that financial commitment, don’t put all your eggs in one basket. Do it slowly.”

Learn 7 Reasons You Need a Broker Who Specializes
in Options.

Next: Calls and Puts Are Not Always the Best Place to Start

Calls and Puts Are Not Always the Best Place to Start

Don Montanaro of says that the easiest way to get started with options trading
is to buy puts and calls, but that it’s not necessarily the best way.

“I don’t think that [buying puts and calls] is the best way to get started. Unfortunately, what a lot of rookies do — and
this is where we focus a lot of our beginner education on — is they will pick those put and call purchases, and they may get frustrated
earlier in their lifecycle of trading if that’s all they know and try.”

Don says rookies tend make a directional prediction and then “buy the cheap option, which is typically one or two months too
close, and one or two strikes too close, or one or two strikes too far away.”

Think you have to spend thousands of dollars to get a good options trading education? Think again. See 10
Busted Myths of Options Trading.

Next: Learn While You’re Getting Paid

Learn While You’re Getting Paid

Rather than simply buying puts and calls, Don suggests new investors explore writing
calls as a way for new traders to get started in the options markets.

“I think [covered calls] are a great first option trade for people to focus around for a couple reasons. Number one, the risk
that you have in a covered call is a risk that you already understand, which is risk tied to owning the stock … In addition to that,
you’re making premium … And you’re learning about things as you go through the process of selling covered calls against stock that
you own. You’ll learn about things like implied volatility. And you’ll learn about the importance of how far away from the money you
need to be setting your strikes.”

With covered calls, you learn while you’re getting paid — and that’s about as good as it gets for a new investment.

Learn The Advantages of Covered
Calls.

Next: Profiting From Volatility

Profiting From Volatility

Stephen Ehrlich of says his clients use options primarily as trading tools
to profit from intraday volatility.

“We’re not seeing people come to us with their complex options. We’re seeing that the traders that we cater to, the professional
traders, they’re trading options intraday trying to make money off price swings intraday on the options front.”

And while this strategy might not be the most newbie-friendly, it is important for new traders to understand that trading options
is flexible enough to be used by both neophyte and professional alike.

Learn 5 Ways to Profit
From Volatility.

Next: Getting Started on the Path to Profits

Getting Started on the Path to Profits

So, whether it’s buying puts and calls, writing covered calls or just paper trading your account, following our experts’ advice
should help you gain a new perspective on what to do if you are just getting started trading options.

Of course, what to trade and why to trade it is the province of OptionsZone.com, and that is the kind of expert advice we bring
to the table each and every day.