$175K Options Loss: A Textbook Case of Retail Trading Failure Patterns

The WallStreetBets post revealing a -$175K loss from January 2020 to November 2025 generated significant community engagement with 6,333 upvotes and 1,228 comments. Key discussion themes emerged:

• Tax Strategy
  : Multiple users advised tax-loss harvesting to offset future gains, showing community awareness of loss mitigation strategies
• Opportunity Cost
  : Commenters calculated that investing the same capital in VOO would have yielded approximately $400K instead of losses
• Trading Pattern Analysis
  : Speculation centered on the OP consistently buying puts or 0DTE (zero days to expiration) options during a sustained bull market
• Community Empathy
  : Several users shared similar experiences with options gambling problems, indicating widespread retail trading issues
• Investment Philosophy Shift
  : Consensus advice urged abandoning options for passive index investing approaches

Academic and regulatory research confirms the Reddit case represents typical retail options trading outcomes:

• Failure Rates
  : Studies show 72-90% of retail options traders lose money, with only 1% maintaining consistent profitability over 5+ years
• Market Growth
  : Options trading volume surged to record levels, reaching 12.6 billion contracts by October 2025 (up 24% from 2021)
• Demographic Shift
  : Young traders (under 30) increasingly dominated the market, rising from 31% in FY23 to 43% in FY24
• Cost Impact
  : Transaction costs add approximately 28% to net trading losses, compounding poor performance
• Timeline Patterns
  : Most losses occur within the first 90 days, with 80% of traders quitting within two years

The Reddit case perfectly illustrates documented retail trading failure patterns. The six-year duration (2020-2025) coincides with the explosive growth in retail options trading volume, suggesting the OP was part of the broader wave of increased retail participation. The community’s response—particularly the emphasis on tax-loss harvesting and passive investing alternatives—reflects growing retail awareness of systematic trading risks.

The speculation about consistent put buying during a bull market aligns with research findings on poor strategy selection and market timing errors. The $175K loss, while substantial, represents only a fraction of the estimated $21.7 billion in retail F&O losses documented in Indian markets during FY22-FY24, indicating this is a global phenomenon.

• Continued retail options losses amid record trading volumes
• Systemic risk from young traders (43% under 30) increasingly dominating speculative trading
• Transaction cost drag exacerbating poor trading decisions
• Potential regulatory scrutiny as retail losses accumulate

• Tax-loss harvesting services and education
• Passive investing alternatives gaining market share
• Risk management education platforms
• Brokerage diversification into less speculative products