Happy Monday, traders…

Ben here.

If you’ve ever found yourself stuck trying to decide between two promising option setups — worried that choosing one means losing out on the other — then it’s time to pay attention…

I just described the tricky concept of opportunity cost — a hidden hurdle that every trader faces. 

At its core, opportunity cost is what you give up when you choose one thing over another. As an options trader, understanding this can make a huge difference in how you execute (and manage) your trades.

Opportunity cost creates serious problems for traders — affecting decisions, tying up resources, and playing with our emotions. 

In a market as hot as this one, knowing exactly which contracts to trade — and making informed decisions quickly — is more crucial than ever. 

By the time you finish reading this, you’ll have a better grasp of what opportunity cost is…

Then, I’ll show you how I stopped worrying about it altogether.

Time is Everything

First off, let’s talk about time. 

Time is a resource you can’t get more of. In options trading, time is directly tied to money. Each contract has time decay, so when you choose to buy and sell is crucial. 

When you choose to buy one option, you’re saying “no” to all the other possible investments you could have made with that time and money. 

This is where the concept of opportunity cost kicks in. 

For example, if you put your money into an option that doesn’t perform well, the opportunity cost is the profit you could have made if you had invested in a better-performing contract. 

That’s why I want you to trade the best setups only (but more on that later)…

Protect Your Psychology

Next, we need to talk about the psychological aspect of opportunity cost. 

The fear of missing out (FOMO) can push you to make decisions based on what you think you might lose, rather than on solid research or strategy. 

This fear can cloud your judgment, making you see opportunity costs everywhere and possibly leading you to jump from one investment to another without a clear plan. 

This scattered approach can cost you not only in terms of missed opportunities but also in fees and lost focus.

The tricky part is that you won’t know what the best choice was until after the fact, making opportunity cost a constant shadow in decision-making.

Hindsight bias can tempt you into thinking “I knew I shouldn’t have done that.” But at the time, you didn’t.

This is why you need to trade like a farmer — be very deliberate about which contracts you trade (and which you choose to pass on).

Don’t Over-Diversify Your Trading

Diversification is another factor closely tied to opportunity cost. 

While it’s wise to diversify your investments to manage risk, over-diversification in trading can lead to mediocrity. 

If you’re buying too many options contracts to try and cover all your bases, you might be diluting your edge … and your potential profits. 

Each dollar can only be invested once, so if it’s spread too thin, you might miss out on the bigger gains you could have made by focusing on the best opportunities…

How I Stopped Worrying About Opportunity Cost

When I first started trading, I had no idea what contracts to trade.

Looking at the tens of thousands of “options” in the market, I was overwhelmed.

But ever since creating my Spyder Scanner, all that has changed.

I no longer worry about opportunity cost because Smart Money sweeps give me the conviction I need to hold the contracts through pretty much any price action.

If I see that a Smart Money trader is betting millions of dollars on a short-dated options contract, I know that the odds are in my favor — those contracts are very likely to deliver outsized returns. 

By focusing on the Smart Money contracts, I never feel like I’m costing myself opportunity — I know I’m in high-probability plays. 

Click here to start using my SPYDER Scanner.

Happy trading,

Ben Sturgill

P.S. Speaking of my SPYDER Scanner…

It’s how I’ve been able to lock in recent gains of 168% on GOOGL, 253% on CCJ, and even a staggering 300% on INTC!*

So, if you want to start nailing trades like those…

Join my colleague Danny Phee on HALLOWEEN (THURSDAY, October 31) at 4 p.m. EST to see the most promising ‘smart money’ setups we’re trading this week. 

Seats are limited — Reserve yours before it’s too late!

*Past performance does not indicate future results