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Rather than jumping into trading real options, start by spending a few months trading options on paper. This is an excellent way to learn option trading, and although definitely not the same thing as using actual money, most experts will tell you that this is the best starting point for beginning option traders.

Once you finish tracking your trades on a piece of paper or with a spreadsheet, then the easiest way to gain more experience is to do trading option and should be on a small scale so you can build your confidence and work on your skill. If you look at buying options under $2 or so, one need not risk ample money at the start of your option tutorial.

If you are just beginning to learn option trading, it can be invaluable to choose a broker who will be able to help you with your orders. Selecting the correct broker is important, since with many discount brokers or online trading companies you must enter most or all of the orders yourself. While choosing to work through such a company may reduce your commission costs, thus boosting your overall returns, it may not be worth the price you may pay by forgoing expert assistance.

It is always best to manage your own money when trading options, so whichever broker you end up choosing, it is not wise to let them talk you into a "managed" options account. However, avoid placing all your available funds into the options market at one time. And never lose patience and place all of your money on one "sure bet" as this is an easy way to see all your funds disappear.

You should have an extended plan when it comes to purchasing. Spread your purchases out over several months or longer. Always pay attention to diversification and buy both calls and puts. The very basis of trading options is that put options are profitable when the stock, index, or market goes down; and call options are profitable when the equity price increases.

Be careful not to rush decisions. First of all, only risk money that, if lost, won't cause you hardship ("poker game" money is OK, savings account money is not). Secondly, tomorrow will bring more opportunities so avoid purchases today that aren't solid risk-reward options.