In theory, options should always deliver higher returns than the stock itself. After all, they're leveraged bets. But in real trading? Sometimes the unexpected happens — the stock ends up outperforming the option in percentage gain, especially when time or volatility plays tricks.
Why Does It Happen?
You’re right on direction, the stock flies — but your option… lags or even loses value. Why?
Time decay: Options lose value with time, even if the stock moves slowly in your favor.
Volatility crush: Right after a news event (like earnings), implied volatility may drop sharply, and your option premium deflates.
Wrong strike or expiry: A deep out-of-the-money call doesn’t move much until the stock really explodes — and by then, you may have already sold or expired.
Real Traders Know the Feeling
Ever bought a 3-month call, watched the stock rally 40%, and found your option only doubled — while the stockholder made a clean, low-risk 40%? Worse, if you misjudged timing, the option might expire worthless… while the stock just keeps climbing.
When Stocks Win
Strong, steady uptrend: Stocks reward patience — no expiry pressure.
Market momentum: When everything is grinding higher, sometimes it's better to hold stock and ride the wave.
Less stress: You don’t worry about Greeks or IV. Just focus on the move.
So — Any Trades Come to Mind?
That one time you bought stock as a backup to your options… and the stock outpaced the option returns?
Or when you went all in on calls, only for the stock to rise slowly — and your option bled out?
Yes, options offer the upside — but stocks often reward conviction and calm.
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