Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

The Volatility Trap

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The Volatility Trap: Why Most Traders Fail When It Matters Most

Every options trader eventually learns this lesson—some the easy way, most the hard way.

It’s easy to feel confident when volatility is low, when the market is grinding higher, and when selling premium feels like free money. But the moment volatility spikes, that confidence turns to fear. And fear? It destroys traders.

Not because the market is inherently cruel.
Not because options are “risky.”
But because most traders are psychologically unprepared for what real market stress feels like.

Let’s talk about the Volatility Trap—the mental errors traders make when markets get wild, and how to avoid them.

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A Random Dog Walk

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…….down Wall Street

Only a few days ago, I saw the patch of sidewalk in Durham, North Carolina where the market bottomed. On the morning of October 13, 2022 (no, I do not have to look up the date) I was walking one of the gazillion dogs I have brought into my life (Rolo), anxiously holding on to my iPhone and awaiting the CPI report. 2022 had been a superb year for me, as well as for Slope, and I was waiting for the next leg down in the bear market to take place.

The CPI number hit, and it was hot, and the market plunged……….for a minute. I didn’t know it at the time, but, thanks to additional trillions of dollars that our idiotic and short-sighted government hurled at equities, the Dow would have 20,000 points added to its value in the span of just a couple of years. It goes without saying that the event is seared into my consciousness both vividly and painfully.

In sharp contrast, I was walking a different dog this morning, anxiously awaiting the CPI, and it came in hot, just like before.

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