What actually is the point of selling someone an option? Do enough people buy th... | Hacker News

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		globular-toast 8 months ago \| parent \| context \| favorite \| on: $70M in 60 Seconds: How Insider Info Helped Someon... What actually is the point of selling someone an option? Do enough people buy them and lose to make it worthwhile for the seller? Isn't this literally just legalised gambling? Are there enough addicts to make it lucrative like other gambling? Or are these resold packaged up into something that nobody reads à la synthetic CDOs?

dboreham 8 months ago [–]

It's basically gambling+, but the party on the other side of the trade is like a casino. On average they make money (usually).

+There are some non-gambling reasons for stock options trading, akin to commodities options being used to reduce risks in farming.

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