The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone, this is Kirk here again at Option Alpha and welcome come back to the daily call. Today, we are going to be talking about a very interesting topic which is the expected probability paradox for options traders. Yes, this is what I call “the expected probability paradox.” I don't know why I referred to it as that, but I did recently in a coaching session and now, I’m going to start using that because I think it actually really truly represents what this means. Here’s the crux of why you're listening to this podcast or if I sent you this podcast or emailed you this podcast, added a link to it or referenced it, this is what we’re going to be covering. The common question in options trading (we get this literally all the time) is – “If I'm trading at a 70% chance of success level and our max profit opportunity per trade is $100 and our max risk if we lose is say $300…” Again, showing that it’s not a 1:1 relationship when trading options. If you could make $100, when you lose, you couldn’t make or lose