Deep Options 02 The Most Expensive Thing Retail Traders Consistently Buy There is a very specific trade that almost every developing options trader makes at some point.
Deep Options 02 The Most Expensive Thing Retail Traders Consistently Buy There is a very specific trade that almost every developing options trader makes at some point. The setup feels logical, almost irresistible. A major event is coming. Earnings. CPI. FOMC. A product launch. A legal ruling. Something that will obviously move price. The trader thinks: volatility is coming, therefore I should buy options. What they do not realize is that this thought is already reflected in the price they are paying. The market is not surprised that an event is coming. The options market is a forward pricing machine. It does not wait for uncertainty. It prices uncertainty in advance. By the time a retail trader notices that “something big is coming,” the options market has usually been adjusting for days or weeks. Implied volatility rises not because the event happened, but because the possibility of th
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