Here’s something nobody likes to admit: If you try to trade options the same way your uncle trades stocks in his Fidelity account, you’re going to lose money.
You’ve heard it a thousand times — buy low, sell high.
Although that sounds good and feels smart when you’re trading stocks, it can work if you’re OK with holding a stock through five different CEOs, two recessions, and the slow death of your hairline.
But in options, that mindset will eat your account alive.
I learned this lesson fast, and I learned it the hard way.
Back when I first got onto the trading floor at Bear Stearns, I remember this young guy who was sharp, came from an Ivy League school, and thought he would retire by 30.
He came into options trading thinking he could “buy the dip” on calls or puts the same way he’d been taught to “buy the dip” on stocks.
The problem? Options don’t care what price you bought at.
They care how fast something happens, and whether the market was already expecting it.
Let’s look at this some more and learn how to turn it to our advantage.
Not So Fast
Here’s what most people don’t understand:
Options aren’t bets on direction; they’re bets on expectation vs. reality.
Let’s say a stock is trading at $50 a share, and earnings are coming out next week.
The options market is pricing in a $10 move in either direction. You think, “Hey, I’ll buy a call, ride it up, sell it higher.”
But here’s the problem — you’re not the only one thinking that.
The market already priced in that $10 move.
So if the stock only goes up $5, your call might actually lose value, even though you were “right.”
Let me say that again:
You can be right about direction and still lose money.
That’s why this idea of “buying low” on an option and “selling high” later is fantasy thinking.
Options decay over time. They bleed value by the day, sometimes by the minute.
They’re not designed to be held like stocks.
Most people treat options like cheap lottery tickets, hoping for the big win.
Instead, real traders think in terms of probability, timing, and volatility, not “cheap” or “expensive.”
I’ve seen people buy puts on a stock that just got hit with bad news, thinking they were getting in at a “low price” because the stock already dropped 10%.
But what they didn’t see was the implied volatility through the roof, and the premium they paid for those puts was practically screaming, “This better fall another 20% tomorrow or you’re toast.”
And guess what?
The stock bounced, not because anything changed but because the panic was already priced in.
A Jagged Edge
The truth is, option premiums are like loaded dice.
You’ve got to know what the house is expecting — and how much you’re paying to play.
I teach my students to stop thinking like retail traders. You need to look under the hood.
Ask:
- What’s the implied move?
- Is this trade priced for perfection?
- What’s the market not expecting?
That’s how you find edge. That’s how you actually make money trading options.
I’m not saying direction doesn’t matter. Of course it does.
But timing and expectation matter a lot more.
You have to stop thinking like someone watching a stock ticker on CNBC, and start thinking like someone running a sportsbook.
We’re not betting on who wins the game. We’re betting on the spread.
And when you think like that, the old “buy low, sell high” mantra goes out the window.
Game Face On
If you treat options like stocks, you’ll trade yourself broke.
If you want to make real gains with options, start by forgetting the stock market clichés.
This is a different game.
You can either keep guessing, or you can learn how to trade like the pros do.
Your choice.
Stay street smart,
Jeff Zananiri
P.S. Looking for an edge?
Danny Phee’s going live today at 4 p.m. ET inside the APEX War Room — and he’s not holding back.
He’s calling out what’s moving, the setups he’s stalking, and the trades he’s ready to pull the trigger on — all while most traders are still stuck chasing shadows.
If you’re serious about stacking real wins, you’ll want a front-row seat for this one.
*Past performance does not indicate future results
