I started trading options because I thought I had an edge. A friend's nephew is in the industry and said "I would not trade options at retail". Following, my experiences and conclusions. I read a few academic books about options and its quite interesting. But trading them retail, I found that I would never get an inside fill (inside the bid/ask) and it was hard to get my order filled even at the current bid or ask. For every underlying, there are often dozens of derived options, thus they're not very liquid. Further, the idea of putting on complex positions described in the book (strangles, condors, etc.) just seemed overwhelming. I never tried it, but I felt certain I'd get hurt while struggling against the illiquidity, to leg in or leg out of a synthetic position. It often felt like other people were cutting in line ahead of me. I then read the book "Options Market Making" and things got a bit clearer. All that academic stuff does get used... but only by the banks writing the options and the market makers making markets. These people have rooms full of computers and math guys constantly balancing out all their greeks for them. They never speculate, they never take any risk, and they always make money. Furthermore, the market makers, get inside fills all day long. They don't face the liquidity and execution problems we do at retail. The book even advised them to turn an ear towards the nearby futures pit to give them an extra edge. I'm not going to say they're cheating, but they do take home a lot of money, and its a zero-sum game, if you're wondering where you fit in. Let's just say the market maker is not your friend. Where that leaves us is that if you trade options at retail, even if you have low commissions like at Interactive Brokers, you still have an uphill struggle to even get in at a decent price, and you still will be paying the bid-ask spread, though of course, 90% of your options will simply expire worthless, so you may not face the second half of that, but you still pay. Where that leaves us is, your options trade is speculating. This is something the big boys never do, and you might speculate on why they never speculate, and its not simply because they do so well using their existing advantages. Even you guys with fancy condors or vega scalping or whatever, and yes, you guys who sell covered calls (which is identical to a selling a naked put, and if you don't know why you shouldn't be trading options). Having said that, you may just straight want to speculate. In some sense, even going long stocks is speculation. Maybe, like for me, you feel you know an industry well enough to have an edge, and you want to bet that a certain stock is going to go up or go down. And you want to bet that it will happen fairly soon, bearing in mind that a stock moving means that all the numbskulls who drove INTC down will soon change their minds and drive it up. (It doesn't matter if you're right or wrong, what matters for the stock price is what other people think). My conclusion about the best options strategy: buy a put or buy a call, period. Buy one near the money, because they're a lot more liquid (or can simply be exercised) once they're in the money. And pad your timing with at least an extra month, because the theta will kill you in that last month. And remember that you are speculating. I would also watch it carefully and consider cashing in early rather than late as the market unfolds. This may be built-in to the above, but I would also keep away from options priced less than 50 cents, the bid-ask nickel quantization will hurt you. Those are the conclusions I reached. I had a lot of fun doing it, ran my portolio up 30%, then only 15% up, then settled at 20% up, over 2 months, and, you tell me, I learned something too. Would be happy to learn some more if you can reply. Right now, I picked up an INTC OCT 17.5 call, because the news on Conroe is going to break in July. I know there are people here who say they are making a lot of money, and I just wonder how you do it, do you create synthetic positions or 2 or 4 options, do you just put in market orders, do you balance your greeks daily? Seems like a long row to hoe but if you're making 6 figures who am I to judge you.