The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to be discussing why “the market is always right” is actually false. This one might be a little bit tough for some people to stomach and go through, but the reality is that the market is not always right when it comes to actual value. Where I think I differ from a lot of people with this statement is that I do believe that the market is always right when it comes to expectations, but expectations as we know in options trading is not the same as reality. And so, what some people would always say (and I used to be in this camp admittedly when I started trading) is I would think to myself – “The market is always right.” I don't know that there's something else out there. But the reality is that having traded through scenarios like the flash crash and the 2008 collapse, etcetera, what I’ve realized is that the market is always right based on expectation. Whenever the expectation is of the prevailing mark