Think Like an Option Trader: How to Profit by Moving from Stocks to Options

Appendix: Quantum Physics and Trading—The Price Uncertainty Principle

I’m no physicist, but I do have a fascination with the workings of the subatomic world. There is a model within quantum physics that can serve well for understanding the dynamics and limitations inherent in trading. Comparing quantum physics and trading might be too outside-the-box to discuss within the main book for some readers, but it is still fun and, although far from a perfect analogy, useful enough to merit some space. In my mind, this is how I best understand the differences between stock and options trading.

Subatomic particles have two basic properties that we can measure: position and momentum. The “Heisenberg Uncertainty Principle” states that we can know either ...