Why it matters
Opportunity cost is the hidden loss of dead money trades and attention drains.
Decision use: treat this term as a risk input. If you can’t observe it, you can’t size for it.
Common trap
Treating idle capital as ‘wasted’ and forcing trades.
Example
Holding a mediocre trade means missing the week’s best setup.
Operational cue: if you can’t point to it on the chart, in the DOM, or in your broker logs, treat it as a story and trade smaller.
Notes
Optionality has value. Protect it.
Quick rule
- If you see this repeatedly, you are in a different regime than your model assumes.
- Regime change usually means position size change.
- When in doubt: trade smaller, or don’t trade.