2026 Outlook: Be Careful Who You Listen To

By: Hans Albrecht

As we head into 2026, I want to start with something that has nothing to do with where the S&P might trade or how many rate cuts are coming.

It’s this: be very careful who you listen to.

It has never been easier to look like an expert. Put up a website. Post a few charts. Use the right buzzwords. Sell a subscription. Suddenly, you’re a “pro.”

But looking like something and being something are very different things.

This is where the Dunning-Kruger effect comes in - the tendency for people with limited knowledge to overestimate how much they actually understand. And nowhere is that more dangerous than in options trading, where leverage and convexity turn small misunderstandings into very large losses. There’s a growing belief that options are easy. Anyone can do it. Click a few buttons, collect some premium, rinse and repeat.

That belief is costing people real money.

Over Christmas, we saw the Captain Condor blowup. Members reportedly lost around $50 million. The strategy worked until it didn’t, which is exactly how most bad option strategies behave. They grind higher, look “safe,” attract followers, and then one event wipes out years of gains.

This isn’t new.

Think back to the volatility fund blowups in 2018. Or the short-vol products that detonated in early 2020. Same story. Smooth returns. Big marketing. Then a sudden, unrecoverable loss. I see versions of this all the time. A mentoring student once came to me running a short straddle strategy swinging up and down 70–80% in a single week. No real edge. No structure. No value to clients. Just reckless exposure disguised as sophistication. Or take a recent example from a few months ago: a call sold for $0.14 that was worth $28 two days later. That’s not bad luck. That’s convexity doing exactly what convexity does.

So let’s pause on that word for a moment. Convexity means risk is not linear. When you’re short options - especially naked options or poorly constructed spreads - your losses can grow much faster than your gains. You might make small, steady profits for months or years, but when you’re wrong, you’re very wrong. Being short convexity means the downside can dwarf the upside. That’s why execution, structure, and restraint matter so much. You have to avoid structurally dumb trades where the risk-reward simply doesn’t make sense.

Two Augusts ago, another strategy blew up. Paid followers were put into a complex ratio structure - something like a 1 by 2 by 3 or 4 - funded by selling a supposedly “worthless” far-out-of-the-money put. Unlimited risk, dressed up as clever engineering.

On the S&P, which is cash-settled, there is no chance to own something lower and recover. When it goes against you, you’re done. Accounts were down 50% in a matter of days.

And here’s the part that really concerns me. On X, on Twitter, I regularly see people positioning themselves as very high-end options experts. Everyone uses the word pro. Recently, I saw a very nice guy - works hard, clearly well-intentioned - promoting a new book on option selling. But in a public post, it was obvious he didn’t understand how covered call income funds actually work. He didn’t understand distributions. He didn’t understand what is income versus return of capital. He didn’t understand the mechanics at all. I’m not saying there’s anything malicious there. I don’t think there is. But it’s a textbook example of Dunning-Kruger: someone who thinks they understand something deeply, but doesn’t yet realize what they don’t know.

And here’s the uncomfortable truth. This is your money.

You would vet a lawyer carefully. You would interview accountants. You would ask about experience, credentials, and past work. Yet in this industry, people will read a few posts, see a nice chart, watch a polished video, and then hand over $50,000 or $100,000 of hard-earned savings - money earned with real effort, stress, and sacrifice - to someone who simply claims to be an expert. That’s an incredible thing when you step back and think about it.

Options is one of the most dangerous areas of finance, yet it’s one of the least regulated in terms of who gets to present themselves as an authority. I can’t wake up tomorrow and say I’m a lawyer or a doctor. But I can put on a headset, open a Discord, and call myself an options professional. That should make people pause. Experience matters. Real experience. Scar tissue.

I don’t claim to have all the answers. But I spent 15 years as a professional market maker, followed by another decade running roughly a billion dollars in income and downside-protection strategies. That experience teaches you just as much about what not to do as what to do.

Many of these strategies are destined to fail eventually. That’s the model. They work, they attract assets, they sell subscriptions, and when they blow up, they quietly shut down and rebrand. It happens on Wall Street. It happens on social media. It happens everywhere incentives reward short-term performance over long-term survival.

As we head into 2026, my message is simple:

Stay skeptical. Avoid temptation. Respect convexity. And don’t confuse confidence with competence. Trade smart. Stay hedged.