Night Reading on Investing | How Option Market Champions Trade in Live Sessions

Recently, I reread The Art of War, and was once again moved by the wisdom embedded within it. For traders, what the book conveys is not a power-strategy, but a rational calculation that integrates “the Way (道), Heaven (天), Earth (地), the General (将), and the Method (法).” This is the foundation for traders to stand firm and thrive in financial markets.

Win by Surprise, Not by Competing with the Crowd

As everyone knows, there are far more losers than winners in investing. If traders want to keep making profits, they must choose to stand with only a small number of people. As The Art of War says: “In all battles, take the direct approach to join issues, and use the unexpected to win.”

From repeated hands-on experience, I’ve realized that option buyers must make good use of the advantage of “limited losses,” and adhere to a “low price is king” strategy. They need to both leverage the “absolute low price” advantage to control risk, and seize opportunities of “relative low price” to improve win rate. Option traders don’t need to be constrained by directional selection; instead, they must find the best balance between risk-reward ratio and win rate.

In April 2025, on the first trading day after the so-called “reciprocal tariff” policy of the Trump administration was announced, I placed buy orders before the market open for commodity futures related to precious metals, non-ferrous metals, and chemicals, aiming to capture low-price opportunities when the market panicked. Over the following week, as market sentiment gradually stabilized, commodity option buyers also had plenty of chances to position at low prices. Near the May Day holiday, on April 29, 2025, I double-bought deep out-of-the-money options on precious metals, and on April 30 in the afternoon, I took the opportunity created by rising implied volatility that pushed up option premiums, closing out and realizing most of my positions. After the holiday, market performance was rather flat again, once more confirming the market rule that “history repeats, but not in a simple way.”

On the morning of November 17, 2025, lithium carbonate futures opened slightly higher, then quickly surged. As an option buyer, I promptly completed two short-term trades on the LC2601p90000 contract. As the option expiration approached, I focused on the resonance between technicals and fundamentals through the LC2601c100000 contract, accumulating solid returns with intraday swing trades.

First Ensure You Can’t Lose; Then Wait for the Opportunity to Win

For ordinary traders, the “calculation” wisdom in The Art of War is worth learning. In Tang Taizong Li Shigong Wen Dui (《唐太宗李卫公问对》), Taizong’s view is especially incisive: “I observe thousands of chapters and ten-thousands of lines, but it all comes down to just one sentence: ‘Many sides use errors to mislead.’” This aligns with Buffett’s value investing and Soros’s reflexivity theory—grasping trading opportunities when the market misprices.

As a “weak player” in the market, I do not have advantages in trading skills, information acquisition, or capital size. Therefore, in my trading, I only choose the “battles I can win.”

Specifically, the principles are:
First, strictly adhere to the risk-control bottom line, admit that I will inevitably make mistakes, so never overweight positions; second, avoid time value decay through intraday trading; third, focus on instruments that lead in intraday up/down percentage moves, and combine technical indicators to seize swing-trading opportunities; fourth, track instruments with prominent contradictions in fundamentals, and selectively position in longer-dated contracts when the timing is right; fifth, practice fundamentals relentlessly, and grasp moments when the counterparty misquotes; sixth, in the first half hour before the open, focus on core opportunities and quickly build a safety buffer; seventh, accept small losses and small gains, and aim for occasional big wins; eighth, build on an intraday system, using part of the profits to lay out medium- to long-term opportunities.

These seemingly simple takeaways, in fact, contain the wisdom of “first ensure you can’t lose, then wait for the opportunity to win” from The Art of War. “Weak players” need to be good at waiting for chances that belong to them.

From Knowing to Practicing—A Sublimation

The Art of War emphasizes “Know the enemy and know yourself, and you will never be imperiled in a hundred battles.” In options trading, we must not only understand market sentiment, but also be clear about our own capability boundaries. Looking across great investors at home and abroad, their success is built on a sober awareness of themselves.

The profit path for commodity option buyers is founded on a deep understanding of the nature of the market. If you can escape herd mentality, calmly position during market panic, stay clear-headed during market frenzy, acknowledge your limitations, only act when odds of winning are sufficient, and strictly control risk, then you will have comprehended the wisdom of The Art of War.

The way of trading lies in unity of knowledge and action, and is achieved through continuous improvement.