The Outlier Trading Podcast Tom Sosnoff on Volatility, Risk, and Why Most Traders Misunderstand Options | The Outlier Podcast
May 15, 2025
Tom Sosnoff, co-founder of TastyTrade and a seasoned options trader, brings a wealth of knowledge as he dives into the intricacies of market behavior. He discusses how perceptions shape trading strategies amid economic challenges. The conversation covers navigating volatility, the critical state of America's options markets, and the importance of focusing on the trading process over mere profits. Sosnoff shares insights on risk management and personal trading experiences, highlighting the need for integrity in the trading ecosystem.
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Surprising Resilience of Markets
- Tom Sosnoff finds the bond market and interest rates more surprising than stocks in 2025.
- He believes the market has held up well despite self-inflicted political concerns and conflicts.
Trading Within Two Standard Deviations
- Tom Sosnoff only prepares for market moves within two standard deviations.
- Moves beyond this range are unpredictable and difficult to manage.
Approaches to Destabilized Markets
- In destabilized markets, stay small and consider contrarian strategies.
- Selling premium or taking directional shots are the main approaches to capitalize on volatility.