Have I ever mentioned that this is really hard? I try to simplify options for you and make it a little easier to understand and win, but the reality is that options trading is challenging and difficult to navigate. The past few weeks in the market have felt like a stress test for even the most seasoned traders. If you feel like you are being tested…you are! Success in options trading really isn’t about the right strategy, or system, or set up, or account size, or research, it’s about you. Do you have the right mentality? Do you have the right decision making skills? Can you stay calm under pressure? All of these things affect your P&L in options trading. Since the beginning of the Iran conflict, we’ve seen sharp swings across equities, commodities, and volatility. Oil prices surged aggressively, gold pulled back after an initial spike, and equities experienced sudden, sharp drawdowns. For traders following the Put Path Options Trading System, this type of environment exposes both the strengths and the psychological challenges of a systematic approach. This post is about three things:
- What’s actually happening in the market right now
- Where things went wrong (including my own losers)
- Why your own discipline, not prediction, is the real edge
What We’ve Seen: Oil Up, Gold Down, Chaos Everywhere
Geopolitical events tend to inject uncertainty, and uncertainty drives volatility. That’s exactly what we’ve seen:
- Oil Spikes: Supply concerns and geopolitical risk pushed crude higher quickly
- Gold Whipsaw: Initial flight to safety, followed by a sharp drop as markets repriced expectations
- Equities Under Pressure: Rapid drawdowns, especially in high-beta names
- VIX Expansion: A clear spike signaling fear entering the market
For options traders like us, who are selling premium through Put Credit Spreads, this environment creates larger pricing swings, wider drop margins, and bigger potential losses.
The Reality: Max Losers and Missed Discipline
Full transparency: this period produced some of the largest losers we’ve seen in years within my underlying list. I have been sick off and on the last couple of weeks too and I was not able to monitor my positions closely enough. No excuses though, if I wasn’t able to stay on top of the positions, I should have closed them out and been ultra-conservative. Instead, I let them ride and some of them produced real max losses for the full value of the spread, which I haven’t seen before with this system. The hard truth is that I lost discipline and missed closing some of them. I didn’t close every trade at our pre-defined 200% max loss level. Instead I let a few positions linger. I hesitated, expecting a bounce. I broke the mechanical discipline that defines the system.
What Happened?
- Several trades quickly approached or hit max loss thresholds
- Market moves caused multiple positions to lose simultaneously
- Volatility expansion accelerated losses faster than expected
- I lost a net of 4.3% for the month of March 2026
Why This Matters: The System Only Works If You Follow It
The Put Paradise system is built on probabilities:
- ~85% winners
- ~15% losers
- Controlled risk through defined exits
But here’s the catch:
The system assumes you actually take the losses when they occur.
Once you deviate:
- Small losses turn into large ones
- Capital gets tied up
- Emotional decision-making creeps in
And that’s exactly what happened to me over the last few weeks. Sure, I could blame Fidelity or being sick or not having clarity in my thinking process, but the reality is that I just failed to act. I should have closed out the losers earlier. Now, my losses overall were not staggering (4.3%), but I haven’t had a losing month in over a year so it was not a fun position to be in. Now, for 2026 YTD, we still have an estimated annual rate of return of 45.5% and a 85.7% win rate so all is not so dire, but it still hurts to lose discipline and lose money.
The Psychology of Volatility (This Is Where Traders Break)
When volatility spikes, three dangerous behaviors can show up:
1. Freezing (Failure to Close Losers)
You convince yourself:
- “It’ll come back”
- “It’s already down too much”
- “There’s no way that (fill in the blank) will happen”
This is what happened with some of my losers.
2. Revenge Trading
You try to:
- Re-enter the same underlying in the same week at a different price
- Make back losses quickly
- “Turn a loser into a winner”
This is one of the fastest ways to compound damage.
3. System Abandonment
You start thinking:
- “Maybe I should switch strategies”
- “Maybe I should buy Puts instead”
- “Maybe I should quit trading options”
This is capitulation; and it almost always happens at the worst time.
The Disciplined Framework
Let’s ground ourselves again in the principles from the Put Path Options Trading System. We need to be sure to:
1. Stay Mechanical
- Execute the same process every week
- Do not adjust the process based on fear
2. Respect Losses
- Close at 200% max loss
- No exceptions
3. Keep Trading (Even in Bad Weeks)
- Volatility increases premiums
- Future trades become more favorable
Why Volatility Is Actually an Opportunity
This is the paradox. The same volatility that causes losses also creates future profits. Here’s why:
- Higher Premiums → More income per trade
- Wider Distances Between Stock and Strike → Greater margin for error
- Mean Reversion of Volatility → VIX eventually falls
Historically, volatility behaves like a balloon:
- It expands rapidly
- Then slowly deflates
When it deflates:
- Your sold premium benefits
- Trades placed during high volatility become winners
Now, I have no idea what is going to happen next week, but it does seem like volatility has hit it’s max for this cycle. If that is true, we should see a slow deflation back to normal VIX long term average levels around 17 or 18. The VIX is currently at 23.87 and we saw a max of 35.30 on 3/8/2026. That slow deflation would allow us to reap the benefits of higher premium while the market stabilizes and we should go back to our >85% win rate each week. So now is the time to continue with the system and continue to put trades on.
Lessons From This Volatility Cycle
In wars or other crises, correlation among underlyings tends to spike. Our diversification helps, but during panic almost everything moves together and losses can cluster. Losses are not the problem, but lack of discipline is. You can survive 10 losing trades in a month (as long as they are reasonable losses), but you cannot survive long-term if you continue to ignore your system. The market rewards consistency, not emotion. The traders who win execute repeatedly, ignore noise, and trust probabilities. The Put Path Options Trading System has not changed. The market is not broken. The market has not changed. What is getting tested is you.
- Can you take losses without hesitation?
- Can you avoid revenge trading?
- Can you continue placing trades when it feels uncomfortable?
That’s the real edge…improving your own trading. Options trading is really about improving your own decision making, taking responsibility for your actions, and controlling your emotions. As for me, I did not perform optimally the last few weeks, but all was not lost. I didn’t completely abandon the mechanics. I continued to open new positions each week. I closed out 36 winners in March. I made some good decisions to close out TLT and IYR before the losses got too great, but I did let GLD losses get too big and I had to take the true max loss on NDX on a 100 wide spread…ouch. This is part of the process, to track your trades, to reflect, and to improve.
Final Thoughts: Trading Ultimately Refines You
If you’ve been trading through the past few weeks, you’ve felt the pressure, the uncertainty, and the temptation to deviate from discipline. But this is where long-term performance is built. Not in easy markets; in moments like this. The path forward is simple as always:
- Stay disciplined
- Stay mechanical
- Stay consistent
Volatility will fall eventually. Premium will decay. The system will work—if you do. If you haven’t already, download the Put Path Options Trading System Guide. It outlines the full methodology used to structure these trades. Remember, options trading is better when it’s not done in isolation: leave a comment below with your thoughts or questions, and let’s keep the conversation going!
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