Basic Points

• Ergodicity is a concept of being able to inherit statistics from the crowd without encountering acute and severe pain from outlier events. 
• Using wingtips (capping risk with outlier positions further out of the money), reducing size, spreading out strategies across different strikes and expirations, and delta-hedging (actively rebalancing directional risks) such as with emergency stop limits (exit plans that open defensive positions) are all ways to tap into winning strategies without opening up the direct consequences of catastrophic tail risk, which are loss events that only have a fraction of a percent chance of becoming a reality. 
• Whenever the risk is undefined in a strategy, which means potentially unlimited losses, thinking in terms of ergodicity is a survival move which keeps a trader in the game for the long run.

The main idea is to receive benefits from the averages of the crowd while defining risk against loss with uncapped variance (the square of volatility). In order to be protected by ergodicity, it is usually necessary to make concessions such as willfully paying for insurance even though it is well-known that the odds are in the house’s favor. The customer accepts this in order to gain from ergodicity, which is to enjoy statistical benefits from the group but to avoid being one of the outliers who gets taken out with very bad luck.