HelloI started learning to trade options a few months ago. Due to an overwhelming schedule, I'm still on my first few paper trades.I know the basics about how things work, I use basic methods of trend analysis (Elliot wave, moving averages) and I know in theory how to implement most strategies. What kind of returns can most people expect their first year of trading?And what place do some of the more advanced strategies (Iron butterflies, etc) have? I was told that most of the time the simple spreads and basic calls / puts bring in the most.

Option trading do not expect to make big profits often. It is riskier than stocks and once in a while you might make a good return that is all. It was initiated as hedge instruments and later on shrewd investors figured out strategies to avoid loss. Professional traders do make decent profits but that is after long periods of time. My advice is you learn the dynamics of the option market thoroughly, the Options greeks, like delta, lambda, theta, vega and rho is a good starting point. Then you learn their charecteristics or graphs simly. Try to figure out the state of the market using this and predict where the market is going. Then do a sensitivity analysis of your possible trade on the spread sheat, find out the different gains and losses at different price levels and then find out the down side risk, upside potential, and maximum loss scenarios. Some strategies are self financing meaning you need to invest only little or nothing for a whole lot of trades when the market is in certain state. Study this and you will be able to trade better in options. Sometimes simple strategies will pay off. For example when the market is predicted to move up a call buy and a put sell will pay off. This is self financing for the same strike if you sell enough puts. But you should be sure. And sureity arises from your knowledge of Option greeks and knowledge about volatility like Implied and statistical volatility.

I lost money in my first year trading options. Definitely can make money but, very tough to learn, too much variable to look for. Takes time for you and you mush have deep pocket to scrap through before you can master it.Some time when Stock Goes Up, your option position may not..... Maybe you have not heard this but this happens.On the other side, Stock may stay the same but your option loses value...This is because of the Greeks.So Paper trade until you master it first. Cheers

Your returns are as individual as you are. I started with a small account and have tried several things to see how they work. I am specializing in covered call trades, but have gone long some options. You can see what I am doing at my blog:http://coveredcall.wordpress.comVisit the names on my blog roll. Lots of good info from smart investors.