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THE DATA

Do Retail Options Traders Make Money? What the Data Actually Says

On average, no. In the largest academic study of the question, retail options traders lost 5-9% per earnings-announcement trade, rising to 10-14% around high-expected-volatility announcements (de Silva, Smith & So, "Losing is Optional," Nasdaq data 2010-2021). This page is research and education only — not financial advice.

The short answer, with the headline number

Do retail options traders make money? The best available evidence says the average retail options buyer loses — consistently, measurably, and across every time horizon researchers have tested. In "Losing is Optional," de Silva, Smith and So examined 32,791 earnings announcements using Nasdaq retail order-flow data from 2010-2021 and found retail options traders lost 5-9% on average per earnings-announcement trade, widening to 10-14% around announcements with high expected volatility (de Silva, Smith & So; MIT Sloan / Stanford GSB).

That is not a story about one bad strategy or one bad year. It is a structural pattern, and the mechanics behind it are well documented. Below is the data, the sources, and how to read the numbers without over- or under-stating them.

The key statistics at a glance

Statistic	Figure	Source
Average retail loss per earnings-announcement option trade	5-9%	de Silva, Smith & So, "Losing is Optional" (Nasdaq data 2010-2021, 32,791 announcements)
Average loss around high-expected-volatility announcements	10-14%	de Silva, Smith & So, "Losing is Optional"
Cost of bid-ask spreads alone, as a share of amount invested	~9-10%	de Silva, Smith & So, "Losing is Optional"
Retail dollars transferred to market makers (study sample window)	~$1.5 billion (paper's sample-window estimate)	de Silva, Smith & So, "Losing is Optional"
Average retail option-buyer return over 3-day holds	≈ -16.4%	Naranjo, Nimalendran & Wu
Retail loses at every trade horizon on average (1-, 2-, 3-day)	Yes	Bogousslavsky & Muravyev, "An Anatomy of Retail Option Trading"

Why the losses happen: spreads eat the trade

The most striking finding in "Losing is Optional" is not simply that traders lose — it is where the money goes. Bid-ask spreads alone cost retail traders roughly 9-10% of the amount invested on these trades (de Silva, Smith & So). In other words, before the market has moved a single tick in the trader's favor or against it, a large slice of the position has already been surrendered to the round-trip cost of getting in and out.

Short-dated options around earnings tend to carry wide spreads and rich implied volatility. A buyer pays up for that volatility, and if the post-earnings move is anything less than dramatic, the position bleeds. Across the full sample, the authors estimate roughly $1.5 billion flowed from retail options buyers to market makers over the study window — the paper's sample-window estimate, not an annual or universal figure (de Silva, Smith & So).

Read this carefully: "average" does not mean "everyone." A minority of trades and traders win, sometimes large. The point of the data is the expected value of the average retail options trade around earnings is negative — and the spread cost is a headwind that is present on every single trade, win or lose.

It is not just earnings — it is every horizon

A natural objection is that earnings trades are a special, unusually punishing case. The broader literature does not offer much comfort. Studying retail option-buyer performance across holding periods, Naranjo, Nimalendran and Wu find retail option buyers lose across 1-, 2- and 3-day horizons, averaging roughly -16.4% over three-day holds (Naranjo, Nimalendran & Wu).

In one of the most comprehensive datasets assembled on the topic, Bogousslavsky and Muravyev conclude plainly that "retail loses at every trade horizon on average" (Bogousslavsky & Muravyev, "An Anatomy of Retail Option Trading"). Different datasets, different authors, same direction of travel: the average retail options trade is a losing proposition once costs and adverse selection are accounted for.

How to read these numbers

A few caveats keep this honest:

Averages hide dispersion. These are population averages. Individual results vary enormously, and the distribution has a long right tail — a few trades return many multiples. That tail is exactly what makes the game feel winnable while the average stays negative.
Buying vs. selling. Much of this research focuses on retail option buyers. The economics of defined-risk spreads or premium-selling differ, and the cited figures should not be stretched to cover every options strategy.
Sample windows matter. The ~$1.5 billion figure is the study's sample-window estimate over 2010-2021 Nasdaq data, not a running annual total. Cite it as what it is.
Costs are the constant. The one thing present in every study is friction — spreads, and adverse selection against informed liquidity providers. You cannot strategy your way out of paying the spread; you can only trade in a way that respects it.

Why we cite this against ourselves. We are a trading-education community, and this data is uncomfortable for our whole category. We publish it anyway. We also publish a hypothetical, simulated backtest of our own raw scanner — 161 simulated trades, a 46.6% simulated win rate, and a 0.82 simulated profit factor (labeled hypothetical) — at our public record, and we post losing paper trades on a public board, not just winners. If a service shows you only green, that is a marketing choice, not a track record. You can watch our model desk post its calls, or read more before deciding anything.

Sources & method

The headline figures on earnings trades, spread costs, and the ~$1.5 billion transfer come from de Silva, Smith and So, "Losing is Optional: Retail Option Trading and Expected Announcement Volatility," using Nasdaq retail order-flow data covering 2010-2021 and 32,791 earnings announcements (associated with MIT Sloan and Stanford GSB). The multi-horizon loss figures come from Naranjo, Nimalendran and Wu (≈ -16.4% average over 3-day holds) and from Bogousslavsky and Muravyev, "An Anatomy of Retail Option Trading," which documents that retail loses at every trade horizon on average. All figures are reported as stated in those papers; none have been adjusted or extrapolated. Nothing here is a prediction of any individual trader's results.

Common questions

Do retail options traders make money?

On average, no. The largest study of the question found retail options traders lost 5-9% per earnings-announcement trade, and 10-14% around high-expected-volatility announcements (de Silva, Smith & So, Nasdaq data 2010-2021). Separate research (Bogousslavsky & Muravyev) finds retail loses at every trade horizon on average. A minority win, sometimes large, but the expected value of the average trade is negative — this is research and education only, not financial advice.

Why do retail options traders lose money?

Costs are the biggest documented reason. Bid-ask spreads alone cost retail roughly 9-10% of the amount invested on earnings option trades (de Silva, Smith & So) — money surrendered before the market moves at all. Short-dated options also carry rich implied volatility that decays fast, and retail buyers are often trading against better-informed liquidity providers.

How much do retail options traders lose on average?

Around earnings, 5-9% per trade on average, rising to 10-14% for high-expected-volatility announcements (de Silva, Smith & So). Across holding periods, retail option buyers averaged roughly -16.4% over 3-day holds (Naranjo, Nimalendran & Wu). Over the 2010-2021 study window, the paper estimates about $1.5 billion flowed from retail options buyers to market makers.

Does anyone make money trading options?

Some traders and some trades win, and the return distribution has a long right tail. But these studies measure averages, and the average retail options trade — especially buying short-dated options around earnings — is a net loser once spreads and adverse selection are counted. No service, including ours, can promise a profitable outcome; trading options carries substantial risk of loss, including 100% of the premium paid.

See the process with your own eyes. The desk posts trigger-based cards to a public, timestamped record — losses included — and published the backtest where its own raw scanner loses. The scoreboard is free to watch. Join the floor →

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Last updated 2026-07-15 · ClaudeQuantAlgo Research Desk · research and education only.

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