Two Step Verification is one of the most important security feature for online services. Finally, Microsoft has rolled out this feature on their services. They have started adding this feature for most accounts so if you cannot see it in your security settings, just wait as it will be added to your account.
Here is how you can enable this feature for Microsoft services.
Login to your Microsoft account, click on your name and go to Account Settings.
From the sidebar, click on Security Info and select Set up two-step verification.
It will ask you to select the authentication method. You have the option to either use Authenticator App, Phone number or the alternate email address. If you select any method other than the Authenticator app, it will message or email you the verification code which you must enter in the field provided. It will also show you a QR Code which you can either scan with the Google Authenticator app or Microsoft Authenticator that is available for Windows Phone.
Now, whenever you will log in to your hotmail or Outlook account,
And you are done.
If you are not using Two Step Verification, I will strongly suggest you to enable it on all the online services you use including Google, Lastpass, Dropbox and any other service that supports this extra layer of protection.