Best Options Strategies for Beginners
Start your options trading journey with these beginner-friendly strategies that teach core concepts while managing risk appropriately.
What is These strategies?
These strategies Beginner options strategies are simple, educational trades that help new traders understand options mechanics while limiting downside exposure.
The best beginner strategies are those that teach you about time decay, delta, and risk management without overwhelming complexity.
Sell calls against stock you own. The safest way to learn options while generating income.
- ✓ Simple concept
- ✓ Low additional risk
- ✓ Generates income
- ✓ Teaches theta
- ✗ Need to own 100 shares
- ✗ Caps upside
- ✗ Capital intensive
Buy calls for bullish views, puts for bearish. Simple directional trades with defined risk.
- ✓ Simplest options trade
- ✓ Defined risk (premium only)
- ✓ Teaches delta and theta
- ✓ Leverage
- ✗ Time decay works against you
- ✗ Need bigger moves
- ✗ Can lose 100% of premium
Sell puts on stocks you want to own. Get paid to wait for lower prices.
- ✓ Get paid to wait
- ✓ Potential to buy at discount
- ✓ High win rate
- ✓ Teaches put mechanics
- ✗ Capital intensive
- ✗ Assignment risk
- ✗ Downside exposure
Buy a call, sell a higher call. Reduces cost and defines maximum profit.
- ✓ Lower cost than long calls
- ✓ Defined risk
- ✓ Teaches spread mechanics
- ✗ Caps profit
- ✗ More complex
- ✗ Requires spread approval
Buy puts to protect existing stock positions. Insurance against big drops.
- ✓ Complete protection
- ✓ Simple concept
- ✓ Peace of mind
- ✓ Teaches put value
- ✗ Costs premium
- ✗ Reduces returns
- ✗ Expires worthless if not needed
How We Ranked These Strategies
Rankings based on: simplicity of concept, educational value, risk management, and suitability for first-time options traders.
Beginner Learning Path
- Paper trade for 1-2 months before using real money
- Start with long calls/puts to understand basic mechanics
- Progress to covered calls if you own stock
- Learn spreads once you understand delta and theta
- Size small: never risk more than 2% per trade while learning
Frequently Asked Questions
What is the best options strategy for beginners?
Covered calls are the best first options strategy for beginners who own stock. For those starting with options only, buying long calls or puts provides simple, defined-risk exposure to learn how options behave. Start with paper trading or small positions to learn before scaling up.
How much money do you need to start trading options?
You can start trading options with as little as $500 for buying calls/puts or simple spreads. However, $2,000-5,000 provides better position sizing flexibility. For covered calls and cash-secured puts, you'll need enough to buy 100 shares of stock (varies by stock price).
Related Resources
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