SteadyOptions is an options trading forum where you can find solutions from top options traders. TRY IT FREE!

We’ve all been there… researching options strategies and unable to find the answers we’re looking for. SteadyOptions has your solution.

Back to the Basics: How to Get Started Trading Options

To those of us involved in the Steady Options community, options trading is almost second nature. But most investors, and even most traders, don’t trade options. There may be a variety of reasons why this is the case, but I believe it’s mostly related to the learning curve of understanding a completely new concept.

It can be intimidating at first.


Delta, theta, gamma, vega…options are clearly more complex than just buying a stock or ETF that you think will go up. But the rewards and diversification opportunities of learning options is worth it. After some time, many traders feel as comfortable with options as they do stock. What are some of the ways we could use options in a diversified portfolio?


  1. Risk management. The most basic form of using options is to buy puts as a hedge for long stock. You’re long a stock or ETF that you are bullish on, but you also want to protect yourself against large unexpected losses. Buying a put gives you the right to sell your holding at a certain price for a certain length of time in exchange for a premium. This is very similar to insurance.
  2. “Income” generation. In order for someone to buy a put to protect their position, someone must be willing to sell them that contract. For this reason, option contracts are known as a zero-sum game. Interestingly enough, it’s possible that both parties have the same bullish view on the underlying asset. The put buyer may be hedging his long position and is better off if his hedge expires worthless. The put seller may be bullish on the underlying asset but wants to acquire it at a lower price or simply gain exposure in a less directional way. Selling puts is my favorite overall method for using options, as it has positive expected returns over the long-term with less downside exposure than owning the underlying asset outright. Of course the trade-off is that your upside is also limited. There are always trade-offs.
  3. Speculation. A put buyer could also simply believe the underlying asset is going to decline and buying a put may be an easier way to express a bearish view on an underlying asset than shorting it. It also limits losses to the premium paid, whereas shorting can have theoretically unlimited losses.


These 3 examples outline simple ways to use puts. There are many similar ways to use call options as well, with the most basic and popular method being covered calls (which is similar to selling puts) and then even get into the complexity of spreads. Option spreads are created by combining multiple long and short option positions. So, with all of this in mind what’s a simple way to get started? As I said, I like the idea of selling puts, and that’s what we do in our Steady Momentum PutWrite service.

Each month, with overlapping positions meeting our target exit criteria on a regular basis, we sell slightly out of the money put contracts on equity market indexes such as the S&P 500, Russell 2000, and MSCI EAFE and collateralize the contracts with short and intermediate term bond ETF’s. This gives us exposure to thousands of stocks across the world, as well as exposure to the credit and term premiums in the bond market. By overlaying short puts on a bond ETF portfolio we create “portable beta”, which is a technique that creates leverage.  I’ve written multiple articles about the overall strategy, which you can find here.  

The Steady Momentum PutWrite strategy is the most conservative strategy available for subscription on the Steady Options website, and is relatively simple to follow. This makes it ideal for traders of all kinds, but especially those new to the options markets. In my article, I share examples of how put selling might have performed over the last several decades based on publicly available data from the Chicago Board Options Exchange (CBOE) to help set proper expectations and to provide subscribers with confidence. 


I also professionally manage this strategy for clients of my firm, Lorintine Capital, which I co-own and operate with my business partner Chris Welsh. You can read more about managed accounts here. The investment minimum for Steady Momentum PutWrite managed accounts is currently $100,000, but as a self-directed subscriber where you manage your own account, you can start with less. If you’d like to learn more about the strategy, please subscribe HERE. For questions related to managed accounts, please feel free to contact our office at 214-800-5164.


Jesse Blom is a licensed investment advisor and Vice President of Lorintine Capital, LP. He provides investment advice to clients all over the United States and around the world. Jesse has been in financial services since 2008 and is a CERTIFIED FINANCIAL PLANNER™ professional. Working with a CFP® professional represents the highest standard of financial planning advice. Jesse has a Bachelor of Science in Finance from Oral Roberts University. Jesse manages the Steady Momentum service, and regularly incorporates options into client portfolios.

Related articles:


What Is SteadyOptions?

Full Trading Plan

Complete Portfolio Approach

Diversified Options Strategies

Exclusive Community Forum

Steady And Consistent Gains

High Quality Education

Risk Management, Portfolio Size

Performance based on real fills

Try It Free

Non-directional Options Strategies

10-15 trade Ideas Per Month

Targets 5-7% Monthly Net Return

Visit our Education Center

Recent Articles


  • McDonald's, Not A Shelter in the Coming Storm

    The amount of time and effort that investors spend assessing the risks versus the potential returns of their portfolio should shift as the economy and markets cycle over time. For example, when an economic recovery finally breaks the grip of a recession, and asset prices and valuations have fallen to average or below-average levels, price and economic risks are greatly diminished.

    By Michael Lebowitz,

  • Risk Depends On Your Time Horizon

    Those who are nearing retirement and those who have recently retired represent the majority of my financial planning and investment advisory client base. One of the most common mistakes I hear from these types of individuals is something similar to “I no longer have enough time for the market to come back.”

    By Jesse,

  • Estimating Gamma for Calls or Puts

    In a recent article, the details for estimate Delta were explained. This article deals with estimates of Gamma, which is denoted with the Greek symbol Γ. This calculation measures the rate of change in Delta and is summarized in percentage form. It is alternatively called the option’s curvature.


    By Michael C. Thomsett,

  • Why Options Traders Fail?

    In the last 8 years, I trained thousands of options traders. I have seen many success stories, but also a lot of failures. There are a lot of reasons why many options traders fail. Here are the most common reasons, courtesy of our good friend and veteran options trader Gavin McMaster

    By Kim,

  • Using ORATS Wheel To Test Entries and Exits

    My favorite option strategy backtester is ORATS Wheel, which includes a free trial for those interested. In the Steady Momentum PutWrite Strategy (SMPW), we sell out of the money puts on global equity indexes and ETF’s while holding our collateral in short and intermediate term fixed income ETF’s.

    By Jesse,

  • Estimating Delta for Calls or Puts

    Options trading relies on many estimates of value and volatility. Among these, the most useful estimate is Delta. Even knowledgeable options traders might not fully understand the “Greeks” and how they operate, especially with one another. They are directly related and are useful in making comparisons of market risk and volatility.

    By Michael C. Thomsett,

  • Are Covered Calls a ‘Sure Thing?’

    Most covered call writers enjoy the regularity and reliability of the position. In the majority of cases, the covered call will be profitable, even when underlying shares are called away. This assumes that the strike is higher than the basis in the underlying, and that the call writer understands the real limitations to the strategy.

    By Michael C. Thomsett,

  • Lessons from Bill Ackman's comeback

    Bill Ackman is an American investor, hedge fund manager and philanthropist. He is the founder and CEO of Pershing Square Capital Management, a hedge fund management company. Ackman is considered by some to be a contrarian investor but considers himself an activist investor.

    By Kim,

    • 1 comment
  • Steady Futures 2019 Performance Analysis

    Steady Futures began trading the 50K portfolio in July 2019. It produced a 8.5% return during its 6 months of performance (18.0% annualized). We had three goals when we developed this system. First, we wanted a robust system that benefits from turmoil in the markets.

    By RapperT,

  • SteadyOptions 2019 - Year In Review

    2019 marks our 8th year as a public service. It was a good year overall. We closed 151 winners out of 232 trades. Our model portfolio produced 41.7% compounded gain on the whole account based on 10% allocation per trade. We had only two losing months in 2019. 

    By Kim,


  Report Article

We want to hear from you!

There are no comments to display.

Your content will need to be approved by a moderator

You are commenting as a guest. If you have an account, please sign in.
Add a comment...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


Options Trading Blogs Expertido