If you’re investing for the long term, diversifying your assets is a great way to hedge against the uncertainty the market throws your way.
But when you’re trading stocks, diversification isn’t just unnecessary…
It’s a deadweight.
As an options trader, your job is to zero in on high-probability setups and strike hard.
You’re not in this to own a little bit of everything.
You’re here to find the right trade and push when the odds are stacked in your favor.
Spread yourself too thin and suddenly you’ll miss the one move that actually mattered.
Options trading has everything to do with focus, and very little to do with diversification.
If you want to succeed in this business, pay close attention to these three things.
1. Too Many Trades = Too Much Noise
Trading short-term options is nothing like long-term investing.
You don’t get to “set it and forget it.” Every position demands your attention.
You’ve got expirations, strike prices, volatility, the Greeks … all moving targets.
When you’ve got five or six trades on at once, you’re juggling. And unless you’re a magician, you’re gonna drop something.
Think of it like playing poker online. Ever tried multi-tabling when you’re still learning the game?
It’s a fast way to lose a lot of chips.
Same thing happens in trading. If you’re watching too many hands, you can miss the one that could have made your day.
2. You’ll Miss the Best Trade
Let’s say you’ve spread your account evenly across five names.
Now a killer setup shows up.
Perfect pattern. Great risk/reward. You want in.
But your capital’s already locked up.
Now you’re stuck choosing: Cut something that hasn’t even played out yet … or sit on your hands and let the best setup of the day fly right by.
Either way, you lose.
That’s called opportunity cost. And in options trading, it’s one of the fastest ways to underperform.
You want to be nimble.
When the right setup shows, you need to be ready to hit it with size. Not scrambling to free up capital because you’re knee-deep in four mediocre trades.
3. Commissions Will Eat You Alive
Like everything else in life, options aren’t free.
Some platforms pitch “zero commission,” but the trade-off is a subpar platform and worse execution.
Most real brokers charge between $0.40 to $0.65 per contract.
Trade a bunch of different setups and those fees pile up fast, especially if you’re working with a smaller account.
Now you’re not just losing to opportunity cost … you’re paying to stay diversified. And not in a good way.
If you want boring, diversified returns, do what everyone else does.
Buy an exchange-traded fund. Clip a few percent a year. Sleep easy.
But if you’re reading this, I’m guessing you want more than just “safe.”
You want returns that move the needle.
And that means narrowing your focus, sizing up your best setups, and saying no to everything else.
Don’t diversify.
Dominate.
Stay street smart,
Jeff Zananiri
P.S. Tomorrow at 8 p.m. ET, I’m pulling back the curtain on one of the fastest-growing opportunities in the market right now:
These contracts move fast. They hit big. And when you know how to trade them the right way — they can flip a quiet Thursday into a winning day.
👉 [Save your seat now — before space fills up.]
