[fractionalhare]

> Anyone who buys options is literally gambling.

I guess you also believe the entire insurance industry is gambling too. Out of curiosity, what parts of finance do you think aren't gambling?

If you categorize all speculative activity under uncertainty using the same word, that word ceases to be useful.

[viklove]

Insurance is rooted in statistical analysis.

Buying options, unless you literally buy every option that exists, is not even close to similar.

Did I adequately address your strawman?

[gen220]

If you are purchasing “covered” options, it is absolutely akin to paying an insurance premium to limit the impact of short-term price swings, that are out of your control.

Just like you pay health insurance premiums to mitigate against costlier health risks.

You own 1 XYZ at an average price of $200.00. It is trading for $300.00.

You purchase an option to sell 1 XYZ for $300.00, which costs you $10.00, and expires in 3 months.

You just paid $10 to guarantee a minimum profit of $90.00 in 3 months, regardless of whether the price swings down.

There isn’t any morally harmful transaction occurring here, IMO.

It’s actually less risky than owning a stock for 3 months.

Is this transaction a reprehensible one, for you?

To be clear, we’re not trying to say that all options are created equal. Naked options (where you have no position) are in fact straight up gambling, at least insofar as I’ve tried to reasoned about them.

[fractionalhare]

I bet this person also believes farmers are gambling when they partake in agro futures markets to insure against crop failures...

[viklove]

Yes because futures on corn are the exact same as buying calls on NKLA...

[fractionalhare]

No you didn't address it all. It's also not a strawman because buying options is literally a form of insurance...

Have you ever priced a derivative? What about the estimation of future/realized risk using implied volatility doesn't seem "rooted in statistical analysis" to you?