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I’m not sure what your point is. Sellers obviously think the credit they earn is worth the risk. Buyers think the price they pay is worth it too. It’s just a tw

by tempsy 7y ago

I’m not sure what your point is. Sellers obviously think the credit they earn is worth the risk. Buyers think the price they pay is worth it too. It’s just a two-sided marketplace like many other things. Options writers can and should hedge losses by not writing naked calls (highly risky in situations exactly like this) and instead buy a higher strike option which caps losses e.g. a vertical spread.

gretch 7y ago
You said the option/strike in question was not a dumb lotto bet and you submitted the volume of trading as your supporting evidence. But the state lottery is literally a dumb lotto bet with super high volume. So I don’t see how this wasn’t some set of lucky gamblers. If ER went another way, there’d be some other group making lots of money. Everyone speculating about the future (which is fine depending on the financial circumstances of involved individuals)