Speculative Traders Lost Their Shirts After COVID-19
When it comes to options trading, ignorance is expensive...
Between November 2019 and June 2021, retail investors lost more than $1 billion with bad trades.
That number is staggering considering that the broader market was up 40% over that time frame. However, it's not surprising... at least to me.
Options get a bad reputation for a good reason. If you don't know what you're doing when you trade them, you can lose money fast.
And clearly, many of those who traded during the pandemic had no idea what they were doing. They were bored at home and got into options trading overnight with little to no research done beforehand. They wanted to gamble, and they wanted fast gains... Options provided that.
The inexperienced crowd bet on everything from meme stocks to bankruptcies to COVID-19 reopening plays. And they bet in droves, breaking records on trading volume...
As a 2022 Bloomberg article explained...
Spurred by Reddit posts and urged on by Twitter and TikTok influencers, daily volume in bullish contracts set record after record as stuck-at-home tinkerers flocked to the contracts in an effort to juice up returns.
Losing more than $1 billion didn't deter folks, either. Ever since those massive losses, options trading has become even more popular with the retail crowd...
Last year, there were more than 12.2 billion options contracts executed, according to the Options Clearing Corporation. That's a record-smashing figure and up nearly 24% from 2021 levels.
And so far in 2025, options contracts have already surpassed last year's record-breaking number, with 12.6 billion executed as of the end of October.
Thanks to commission-free trading, social media, and an increased risk appetite, it's clear many investors have been trying their hand in the options market.
But again, most first-time options traders will lose money. A big reason for this is that newbies usually get too aggressive when buying options.
We saw this back in 2021. Here's more from that Bloomberg article...
The derring-do of newcomers was frequently called out by Wall Street. One tactic in particular – buying out-of-the-money calls days or hours before they were likely to expire – was pilloried as a newbie gambler's mistake. In one celebrated instance, more than 50,000 contracts effectively betting that GameStop would surge sevenfold changed hands on Feb. 25, 2021. The option expired the next day.
Think about that for a second... Retail traders were betting real money that GameStop (GME) would move up many hundreds of percent in just one day.
That's absolutely absurd.
As I've said many times before, options are only dangerous if you want them to be. You can, in fact, trade in a safe way and still make good money.
So if you want to learn about different option strategies, I suggest you check out this presentation from one veteran trader with 25 years of experience.
He says that today's market conditions mirror similar setups that helped him make millions of dollars in the past. It all has to do with the system he developed to take advantage of bull runs and crises alike...
This system tracks unusual options activity to identify where Wall Street's biggest players are placing their bets... before the public ever notices. It can amplify returns on quality companies by pinpointing fast-moving opportunities across the market. And best of all, it can do this while limiting downside risk.
So rather than follow the retail-investing herd that chases unrealistic gains with risky, sure-to-fail options, get help from an expert.
What We're Reading...
- Something different: SoftBank's $5.8 billion Nvidia (NVDA) stake sale stirs fresh AI bubble fears.
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Health & Wealth Bulletin Research Team
November 12, 2025