#37 Financial Sabotage Starts in Your Head
This week, we're navigating the wild world of crypto volatility (and no, you don't need a math degree to get it).
We'll also tackle a question every smart person secretly asks: why do I keep making dumb money mistakes?
Plus, we’ll see what we can learn from a master of deception and whether you can still use that weird two-dollar bill your grandma gave you.
Let’s get into it!
Cracking the IV Code for Juicy Option Trades
Recently, I was discussing with a friend what to invest in, since she’s a beginner. As we talked, she admitted she was worried about fluctuations.
The thing is long-term investors usually don’t need to stress too much about volatility. It’s day traders who should pay attention. In fact, volatility can be a trader’s best friend—if you know how to play it.
So I hope what I’m about to share will add to your wealth-building knowledge bank whether or not you trade!
When I started options trading, one of the first things I had to wrap my head around was volatility.
I remember staring at the implied volatility (IV) index and thinking, “Is this high or low? Should I buy or sell?” Let’s simplify it.
Think of IV Rank as a thermometer for market “heat.” If it’s 80%, volatility is blazing—options premiums are fat, making selling (like writing puts or calls) very rewarding.
If it’s 10%, things are icy—premiums are cheap, so buying options costs less. IV Rank tells you how hot today’s volatility is compared to the past year.
IV Percentile is like your class rank. A 70% IV Percentile means 70% of past days had lower volatility. It shows how unusual today’s price swings are, helping gauge risk.
Volatility is like ocean waves for options traders. IV Rank measures how high today’s waves are, and IV Percentile tells you how often waves this big happen.
A surfer (trader) rides big waves to earn big premiums (sell when IV is high) or practices safely on small waves (buy when IV is low).
Practical example:
- Options with IV Rank of 85% → premiums are huge. Selling a put could earn hundreds of dollars for a short-term contract.
- Options with IV Rank of 15% → premiums are low. Buying a call costs less, making it easier to profit from potential price swings.
Using volatility wisely:
- High IV → premium-rich → consider selling options.
- Low IV → cheaper contracts → consider buying options.
- Track both IV Rank and Percentile to avoid overpaying or selling too cheaply.
In short: IV Rank = today’s heat, IV Percentile = how unusual today is, and together they guide smart options trading.
These two stats are your secret weapons — whether you’re trading stocks or dancing with crypto options.
Check out my mini options-selling story and what it taught me.
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📚 THE WIZARD OF LIES
A chilling account of the largest financial fraud in history, reminding us that sometimes, the biggest monsters don’t live under the bed—they live in a fancy New York penthouse. Prepare to feel both horrified and fascinated.
🎯 The Big Idea: This book is a deep dive into the mind of Bernie Madoff, the man behind a $65 billion Ponzi scheme. It exposes how his charm and seemingly perfect reputation allowed him to deceive thousands of investors, including his own family and friends, for decades.
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🚀 Action Step: Don't just blindly follow a "guru" or an investment tip. Ask questions, look for red flags, and make sure your money is in an account you can verify and access yourself. No matter how much you trust someone, your financial future is your responsibility.
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Holding $2 bills is like a mini financial superpower: it’s legal money, a conversation starter, and keeps cash interesting.
My own money journey started with a lot of awkward questions and a healthy dose of confusion.
I’ve been there—staring at charts that look like a tangled mess of spaghetti, or trying to figure out why I keep buying a stock right before it tanks.
But remember, the journey to wealth is less about being perfect and more about being persistent.
Keep showing up, keep learning, and don't be afraid to ask the "dumb" questions—they’re usually the smartest ones.
P.S. Some links in here are affiliate links for tools and wealth-building products I personally use and love. If you snag something through one of them, you'd score a sweet deal and I'd get a perk—at no extra cost to you. Thanks for helping to keep the potpourri fresh!🍃