To the OP's question:
Like others, +2 to using a real platform if you want to trade options in a cost-efficient way. Interactive Broker is good, so is LiveVol. TD Ameritrade has a nice interface called ThinkorSwim. All are good in terms of letting you see the information you need in order to trade in an organized way and act quickly on that information. NB: this is not an exhaustive list, just those with which I've personal experience as a user and feel I can comment intelligently.
In terms of education, any of the large brokerages will have a lot of free materials, etc on their sites, esp if you have $$ with them. The more you have (and the more you trade) the better your commission structure will generally be; commissions are relatively small, depending on what you're used to -- but if paying something like $10-12 per trade (commission, SEC fees, etc) is off-putting, then maybe options aren't a good fit.
Selling cash secured Puts can be OK stand alone or a part of a larger plan, but very wise to educate yourself on how options work and are priced BEFORE you start trading in your acct. Also, note that your account will need to be approved for options trading before you can do these kinds of trades, as they do have the potential for large losses/costs (buying stock at a set price that can be well above the trading price at the time of option expiration)
Many of the large brokerages will allow you to do so-called paper trading in your acct first and this is a good idea; you can test strategies and trades and see how things move around and decide if you're comfortable with a given strategy, risk allocation or underlying to trade.
Having said all that, and noting that NONE of this is investment advice ...
IMHO, selling Puts is a good income strategy, if you are disciplined and follow some simple rules, e.g.:
-
Don't sell P in a name that you wouldn't be happy to own at the price. For example, AAPL at $90 might look like a better buy than say Yahoo at $47 or Exxon at $90.
- Don't sell more puts than you have cash (or other equities' value) to pay for in case the stock comes to you; and you should be OK with the stock coming to you at that price (See first bullet). Note, if you're trading in an IRA, Roth or other tax-advantaged account most brokerages will force you to do this anyway.
- Have an exit plan at the beginning of your trade (for example, if you sell Ps for $100 you want to be OK to buy them back for some price $10, $15, $5, $1 .. to take your profits and close the position) and be OK with making an OK but not outrageous profit (pigs get fat, hogs get slaughtered)
- Have a limit of loss for a bad trade and get out once you hit that limit; similarly, have a total portfolio max % to use for these kinds of trades (e.g. for beginners maybe 5-10% max) -- and stick to these rules!
- Be willing to put in the time to learn about options and how they work .. and also to watch the market and your positions. For example, if you trade monthly options, you'll need to pay attention closely the 5-10 trading days before expiration (generally, the third Friday of each month) and also over the trailing week or weekend to reload your positions. If you decide to trade weekly options, it will require more time and diligence in exchange for higher profit (and risk level).
Mostly, it's about education and risk management ... and it can be lucrative. IMO, it's also fun and keeps me mentally engaged in a fast-paced activity that DW doesn't particularly care about