how to make money on option trading?

The best way to end up with a million after option trading is to start with 2 million. Options leverage your bets on stock movements. Once you are really good at choosing stocks for up or down moves, you can graduate to options. If you are not a stock trading veteran, you are likely to lose all of your marbles trading options. Going directly to options would be like taking an advanced calculus exam before learning basic mathematics.

The best recommendation I can give you is to simply learn as much about options as you can. You can get some good basic information at

http://www.cboe.com/LearnCenter/default.aspx

and

http://www.optionseducation.org/

but I really recommend you read one or two good books on options to expand your education.

My favorite books on options are "Option Volatility & Pricing" by Sheldon Natenberg and "Options as a Strategic Investment" by Lawrence McMillan, but I recommend you try to review multiple books at a large library, bookstore or on-line to choose one written at a level appropriate for you.

It is also critical that you learn how to control the various risks associated with options trading. A lot of option traders think they have found a winning system because they have been making money for months or even years, only to have a single event wipe them out.

If you want one specific recommendation, I recommend every trade be based, at least in part, on your prediction about future volatility of the underlying. If you do not have a prediction about future volatility on the underlying, do not trade options on it.

You are betting that the price of a commodity is going to rise or fall. To make money, buy options on wheat going up in price..

The same way you make money in stocks. It's just leveraged so you make 100% losses frequently, but you can make 500% profits.

This method will always work --

Buy Low and Sell High