The legendary life coach Anna back in Dubai last trip said something I’ll never forget.  Quoting Einstein in reference to my situation she said, “You cannot solve a problem on the same level of consciousness that created it.”

What I've learned in my trading may just be the transcendence that I need to approach my midlife crisis.  For the last year or so I have gotten very deep into options trading and it has been remarkably successful.  The most recent trades completely paid for my former epic summer trip, which was a whopping $10,000 bill.  

There is also a cash consolidation process coming up that is going to plan for the next two big trips.  Basically I'll be liquidating my brokerage account during the transition as it has accumulated a staggering $100k in the first year of trading alone.  It is time to take a break as my other life coach said.  Just like you take breaks in your normal job, you also need to take breaks in trading.

Another trading guru I am learning from explained it this way:  you need to approach options trading with the right style and strategy.  If you do, it’s 80% profitable.  But the catch is that we aren’t treating this as some fun hobby or thrill chasing adventure where you go for the big and reckless wins.  Instead, it’s a business, a full time second job.  The goal is to simply compound many small wins over time and take the occasional big losses as they come.

What happened last Friday night with the Netflix trade was that thill chasing reckless win.  It was exhilerating and fun as hell, but this is not the backbone on which you build a business. 

The main principle behind why all this is profitable has to do with option prices being inflated in terms of their real value.  This is because buyers are paying for insurance against something they can’t control:  volatility.  They would rather pay a premium to enjoy more stability and this becomes a form of insurance for them.  Options sellers in turn provide the insurance.

Most people would generally see volatility as a negative thing, but option sellers see volatility as the very foundation upon where the money is made.  The profits come from realizing how the expected volatility of an uncertain course of events over time is generally higher than the volatility of what actually happens.  In the case of my Netflix trade for example, once earnings came out, the volatility got absolutely crushed.  People now knew what was going to happen next, despite it being incredibly unpcredictable just a day earlier.

Taking a step further, this extends beyond trading into real life.  It encapsulates my midlife crisis very well:  so much of the anxiety of the unknown course of my future comes from a perceived volatility that is more than what really takes place.  In other words, we fear what we can’t control and we think that the future will be more chaotic than it really is.  When things unfold, they are generally more stable.  The problem is that the human brain can’t really think this way.  Ideally we could look back from the future and say it wasn’t that scary.  After all, the current situation we are in now looking back is the future of that past.

In simple terms it is really fucking simple:  I apply for a job, get a new contract, and move to Dubai.  Where's the volatility in that?  Doesn't sound like a midlife crisis to me.  Yet it is because my brain doesn't see it like that.  My brain sees things as incredibly volatile, uncertain, scary, and full of self-doubts where I feel  that I can't do this.

Yet the way out of this crisis is this very paradigm.  One way or another, things will be resolved before June of next year in 2025.  In the end it is going to be smoother than I think it is.