[kiliantics]

There are a lot of baked in assumptions here. For instance, as an extreme example, betting on nuclear war or climate collapse happening and then "winning" doesn't really provide you anything of much use in the society you will be living in after such events.

[spacebanana7]

Extreme events are always poorly priced in markets. For example, there's no point in making a trade for the S&P 500 falling by 90% because if it does we'll be in such a catastrophe that money doesn't matter any more.

Insurance / hedging is most useful in protecting you from realistic well defined risks that affect you personally but not the wider system.

[DeathArrow]

>Insurance / hedging is most useful in protecting you from realistic well defined risks that affect you personally but not the wider system.

But a powerful earthquake can't affect the wider system in a country? and yet, people do buy insurances for earthquakes.

[spacebanana7]

Perhaps I should’ve said financial system plus some system that allows you to spend money on things you’d like.

[appletrotter]

Very astute observation. Might I even add, as humans we never know when our last day could be. So I find it silly to gamble, since I could easily die in a car accident on my way to pick up my winnings.