In the past few years, more and more investors have been buying options instead of stocks. Why? Well, let's face it: Options provide much more bang for your buck than buying stocks. But before you bet the farm on a few golden options, you first need to get your feet wet with a few pointers. After all, trading options is a great way to make money in a down market. However, novice options traders need to remember to start small.

Ken Trester, editor of Fast Options Profits and Maximum Options ,recommends that options traders who don't quite have their sea legs under them yet begin trading options by "playing on paper" because having real money on the table changes the entire game. Recently, I sat down with Ken and asked him what other tips he has for investors who want to trade options without putting their entire portfolio at risk.

#1: Don't Pull a Michael Jordan

The biggest error novice options traders make is overdosing on options plays (a.k.a. putting all of their money in the market at one time). Far too many traders lose patience and jump on what they think is a "slam dunk" with all of their money, only to watch their options waste away and their money disappear. Trester can't stress enough that the most important factors of success in options trading are patience and only playing with money you can afford to lose. And he's right. The options market is open every business day of the year. If you can't place a good trade today, there's always tomorrow.

#2: Always Have a Game Plan

Like any top player in any sport–follow a game plan. Most people enter the options game with the idea of buying some short-term options and watching them skyrocket to big profits. This is the allure and "pot of gold" at the end of the options rainbow. But after a few losing trades, reality usually sets in, and newcomers have to realize that if they are going to survive long enough to hit it big, they must have a game plan to get them there.

Ken recommends that beginning options traders draw up a game plan that spreads your purchases over several months or more. Then diversify with several positions and try to hold both bullish and bearish positions at the same time. That makes a lot of sense because no one (including Ken) really knows what the market is truly going to do tomorrow. In fact, the market was up last week and down slightly this week–so having money on both sides of the coin so to speak is a great way to hedge your bets.

#3: Decide How Much You Want to Gamble Before You Throw Your Hat in the Ring

Decide early on how much you want to gamble. Remember, losing streaks are a part of the options game, and Ken recommends never bet all of your capital on one hand. Go ahead and set aside only a small portion with which to speculate–10% should be an ideal maximum for most beginning investors. Your ability to manage your money will determine whether you succeed as an options trader.

#4: Use a Broker–But Keep the Fees in Check

If you don't know what you're doing at first–find an expert to guide you along the way. Believe it or not, even Ken recommends that subscribers of his Fast Options Profits service work with a good broker when first starting out. First and foremost, look for a good discount broker, because you won't survive the options game if you don't get a major discount on commissions. However, with some discounters, as well as online trading services, you will have to do a lot (or even all) of the order entering without any broker assistance. If you need some assistance executing trades at first, find a broker that provides some.

Without a doubt, commission costs are also an important consideration–they can run from $15 to $40 per trade, so start with enough capital to be able to buy at least four option contracts per position. That way, you'll reduce commission costs per trade, giving you a chance to stay in the game longer and increasing your chance of profit.

And whatever you do–if you go with a full-service broker, don't let him or her talk you into a "managed" options account. When it comes to options trading, it is wise to heed the old poker adage of "when you have money in the pot… play your own cards!"

#5: Always Buy Underpriced Options

Last but not least, Ken's golden rule for buying options is to buy underpriced options like the ones he recommends in Fast Options Profits. Price is the key to success in the options market. When you pay too much for an option, the odds are stacked against you.

Remember that undervalued and low-priced options give you two advantages. First, you are risking less money when you buy a cheap option. It is much easier on the pocketbook to lose $50 than $500 if the option expires worthless. Second, if the stock crosses the strike price (putting it "in the money") before your option expires, you not only win your bet, but your percentage gains will be more than had you bought a more expensive option. Finding under-priced options is simple in theory, but in the real world it takes an enormous amount of work. Ken Trester has developed a computer pricing model that does this better than anyone else out there. This model is put to work every week when he and his team of options experts make their recommendations in Fast Options Profits. Take full advantage of it.

Ken Trester, the "King of Options," has been raking in huge option-trading profits from day one. Literally! The day the options exchange opened in 1973, Ken was right there. And he has been there ever since–never once experiencing a losing year. That's 33 consecutive years of not just profits, but OPTION PROFITS!

If you're looking for expert trading advice each week, then give his Fast Options Profits a try! Ken Trester lays out a game plan for you with every short-term option play, keeps you up-to-date on our trades' progress and gives you new trading opportunities to take advantage of the current market conditions. Start turbocharging your options returns with Fast Options Profits today!