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Path to Options Proficiency

For the new traders, whatever you do, do NOT allow the disenfranchised internet trolls dissuade you from learning and asking questions. The goal of this post is to encourage new traders to stay the path and share some of my learning experience. At the end, I’ll share some thoughts on how I’d go about learning if I were to start over.

Options are complicated. The internet is a WEALTH of information but can also lead to data overload. This is exacerbated by internet assholes that literally have nothing better to do than try and tear others down online. Don’t allow their sad toxic existence slow you down. Remember, you’ll rarely find someone who is doing better than you, that takes unnecessary shots at you. Let the trolls feel internet powerful, it’s the only place they get to.

I started trading in 2007 and my path was not linear. The first year I was struggling to understand why options existed, how they fit into the broader markets, etc. For the first 3 years I accomplished little. I was bouncing between strategies, haphazardly, without outlining my strategies, tracking results, etc. There are several issues here:

-By not outlining anything, as I changed things, I had no way to objectively determine what variant was responsible for what output.

-It also led to inconsistent deployment which makes optimization very difficult.

-For earnings plays, do I want to buy the straddle 10 days out or 7? Should I flatten 3 days out ?

-When selling IVol into the release, do I want to enter early to enjoy some early vol decay? Or does that expose me to directional movement that off-balances deltas before the release?

-By writing a plan, we can track each variant and objectively determine what works.

-I’d also consider maintaining a test for a set duration, 6M, 1Y, etc. I often found myself moving as soon as I hit a losing streak or got bored.

From the 3-5 year mark I started getting my feet under me. This is also when I experienced my largest loss due to greed and Dunning Kruger effect. The workaround here is the same, write a plan where we think through various scenarios so we’re not caught off guard and react impulsively.

From 6-10 years, I created effective tracking (although I wish I started earlier), and began leveraging and scaling. The main thing I wish I did better in this window was spend more time testing how I was going to trade a large account and doubling down on those strategies. After $150K there’s little difference in trading $1.5M other than scale and some product / entry nuances. Ideally, you can tinker with those details earlier.

Options are complicated and have a lot of nuances. To everyone’s dismay, you’re not going to master them in 5 years. 10,000 hours is the common referred benchmark for expertise. At 5 hours per day, for 365 days per year - you’ll need 6 years at least. Don’t let that dissuade you. The way we accomplish large challenges is by breaking them into smaller pieces and tackling one by one. Whatever you do, don’t get scared away from internet nobodies. Find a supportive circle and stick it out. I’m 32 now in a spot I literally never imagined was possible by doing that exact thing. You got this.

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