Sorry, I was unclear. As a sibling pointed out, the question at hand is private employee stock option grants, which act as a lottery ticket because they are us

Sorry, I was unclear. As a sibling pointed out, the question at hand is private employee stock option grants, which act as a lottery ticket because they are usually worth nothing but sometimes worth a very large amount if the company goes public or gets bought. You are of course correct that stock options on the public market are most often used to hedge and thus they do act like insurance. It seems fairly certain that this is not what OP had in mind, though.