Measuring with the Wrong Ruler - How Percent Returns Mislead Options Traders

Traders often struggle not because they pick the wrong direction, but because they measure success the wrong way. In this episode, Bill Johnson explains why percentage returns are a misleading ruler in options trading, and why dollar exposure and notional value matter far more. By comparing cheap, high-volatility stock options to index options like the SPX, Bill shows how small percentage gains can mask poor economics—and why options that look expensive are often the better value. A practical framework for comparing trades on the same scale and avoiding psychologically satisfying but mathematically hostile decisions.