Why That’s Still Losing — and Why Individual Investors Should Stop Accepting It from Professionals Who Ignore Options
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In 2022, the S&P 500 dropped 18%. The Nasdaq sank over 33%. And one of the most common refrains from Wall Street professionals was (and always has been):
“We outperformed the benchmark.”
Let’s translate that:“We lost money — just not as much as the index.”
This might pass as acceptable in institutional boardrooms, but individual investors should be asking a very different question: If professionals saw the risks coming, why didn’t they do more to protect capital? And if they didn’t, why not?
Because losing less than a benchmark doesn’t keep you on track for retirement. It doesn’t fund your future. And it certainly doesn’t qualify as real risk management — especially when they refuse to learn how to use options effectively as part of their overall investment approach.
The Excuse That Fails the Real-World Test
Most individual investors don’t measure success by beating the S&P. You measure it by:
- Avoiding catastrophic drawdowns
- Keeping your income plan intact
- Having dry powder when it’s time to be aggressive again
In that world, “we lost less” doesn’t cut it. Especially when your advisor or fund manager had access to tools that could’ve reduced risk — or even generated income — during the storm.
In recent months, I’ve been writing extensively about these very tools, especially as market complacency took hold following a major run-up in asset prices. That environment allowed us to employ:
- Collars to protect long stock positions
- Protective puts as insurance against sharp drawdowns
- Bear call spreads to capitalize on overbought rallies
- Poor Man’s Covered Calls in uncorrelated assets where premiums remained rich
- And most importantly — the opportunity to harvest heightened implied volatility, systematically and consistently through the use of various credit spreads.
These weren’t just scattered signals in an unpredictable tape. This wasn’t March 2020.
This time was different.
In the months leading up to April’s pullback, I was writing consistently about these exact tools—because the options market had taken on an unusually structured tone. Volatility looked tame on the surface, repeatedly testing the 15 handle in February, which has quietly become the new pivot area post-COVID. But under the hood, the cracks were forming. Asset correlations began to break down. Breadth steadily weakened.
This wasn’t a sudden shift. The signals had been there—flashing for months, not days. And while most traders were lulled by the surface calm, those paying attention had a clear edge.
And yet, many professional managers did nothing. Sat on long-only exposure, never attempting to hedge portfolio deltas. That’s not professional risk management. That’s passive optimism with a fee.
A Higher Standard for Professionals — and for the People Who Trust Them
If someone’s managing your money — or presenting themselves as an expert — they should be using every legitimate tool to protect your capital and position you for the next opportunity.
Options aren’t just for traders. They’re risk management instruments. Period.
- Want to define your downside? Use a collar or protective put.
- Want to benefit from a stalled or slow-moving market? Sell premium.
- Want to stay active without overexposing yourself? Trade vertical spreads.
- Want to build income during uncertain periods? Use IV to your advantage.
These are not exotic. They’re essential. And when you’re dealing with persistent macro uncertainty, rising rates, weakening breadth, and unpredictable monetary policy — they’re non-negotiable.
Final Thought: No excuses. Build your strategy. Own your education.
If your advisor, portfolio manager, or financial voice of choice says, “We lost less than the market,” ask them:
“What did you do to manage risk before the market fell?”
Because the signals were there. The tools were available. And the message from the options market wasn’t subtle — it was clear, consistent, and persistent:
Uncertainty is here. It’s tradable. Prepare accordingly.
If your so-called professional didn’t respond — or worse, doesn’t know how — it may be time to reconsider who you trust with your money.
Markets reward preparedness, not excuses.
When markets are running hot, it’s easy to get caught up in the chase. Everyone’s riding the highs, piling in, convinced the move will never end. But that’s usually when risk is hiding in plain sight.
As an individual investor, your edge comes not from following the crowd, but from stepping back. From protecting your portfolio when it’s unpopular to do so. From cutting exposure, trimming size, or hedging risk — even when others are doubling down.
It’s not exciting. It’s not flashy. But it’s what keeps you in the game.
Because the traders who last aren’t the ones who swing for home runs during bull runs — they’re the ones who manage risk when no one else is paying attention. They stay disciplined when markets are complacent. They listen when implied volatility doesn’t budge, when breadth breaks down, when the story under the surface doesn’t match the price action.
You might miss a little upside now and then — but when the market turns, you’ll be on solid footing while others are scrambling. And over time, that discipline pays off. Quietly. Consistently. Just like it always has.
Trade wisely. Manage risk. Stay ahead.
Andy Crowder
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